Battle of the Button-Downs

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About this time last year, I needed a few new button-down shirts. As one does, I poked around the internet searching for a company that seemed solid and interesting. I stumbled on Proper Cloth, which makes custom-fit shirts starting at $95. Pick a style, pick a fabric, add your measurements, and get a shirt tailored specifically to you.

I’ll bite, I thought, sitting at my computer. A few minutes later — the time it took me to choose, then input my collar circumference (15.5 inches), midsection width (18.25), shoulder slope (normal), and a dozen other numbers I cribbed from a recent suit tailoring — I ordered a Japanese Light Indigo Herringbone, a Grey Melange Plaid Flannel, and a Porto Blue and Red Plaid Linen all with Soft President Spread Collar, Soft Long One Button Cuff, Soft Front Placket Front Placket, and Split Yoke. Three custom shirts for $345. Not bad.

Rather than send all three at once, however, the folks at Proper Cloth ship one to ensure the fit is correct. Custom, by its nature, deals in specific products. If I didn’t like my shirts, I couldn’t return them. Measure twice, cut one, or something like that.

When the herringbone shirt arrived, I took it out of the box and tried it on. It was… much too big. I was shocked and surprised, ready to send it back and cancel my order, until I saw a note suggesting I wash the shirt first. The size would change, a small piece of cardboard in the box promised. I followed the directions, washed the shirt, tried it on again, and it fit. I emailed Proper Cloth and told them to make my other two shirts and send them my way.

Seph Skerritt laughs when I tell him this story. “We make a lot of shirts,” the Proper Cloth founder says, sitting in the company’s headquarters and showroom above a Levi’s store in Soho. “We know how fit changes in the wash.”

Skerritt launched Proper Cloth in 2008. The former systems engineer (he majored in electrical engineering, which he adorably calls “double e”) has seen his company grow from a small brand to one that’s selling well over 100,000 shirts a year. It’s doubled in size every year, he says, with no signs of slowing down. “Last week Tuesday we had a new high for the year,” he says. “Thursday we beat that. Highest week ever. Hopefully this week we'll have a new high.”

Proper Cloth, however, isn’t the only shirtmaker that’s attempting to appeal to a new generation of customers. Brands are combining consumer data, technology, and a direct-to-consumer model with traditional practices in the hopes of making a button-down you'll love. They are steeped in data about their customers and their supply chains, driving interest up and price down.

Most of these companies have their own unique take, something that separates them from the pack. For Mizzen + Main, a brand that’s quadrupled sales every year since its founding in 2012 and boasts Tim Tebow as an endorser, that special sauce is performance fabric. Untuckit, which raised $30 million from Kleiner Perkins Caufield & Byers in June, makes shirts that, well, don’t need to be tucked in.

Ledbury, based in Richmond, Virginia, but spiritually located on London’s Jermyn Street, where CEO Paul Trible previously worked, offers high-quality fabrics and mother-of-pearl buttons for a fraction of the price that the Zegnas and Canalis of the world charge. “The timing of our founding was right after financial markets crashed,” Trible says. “Our target audience was guys who were used to luxury products but were suddenly wondering why they were paying the prices they were. Through online videos, we were able to convince them that our process was every bit as good as what they were paying twice as much for in the stores. They were willing to take a chance.”

The common thread of all these businesses is the internet, which has dramatically altered shopping habits and opened the playing field. This is obvious, but it’s also true and vital.

“The whole smart sizes things is a huge data science project,” Proper Cloth’s Skerritt says. “It's very much broken down to numbers. We follow the data. We have a similar approach for our marketing and our fabric buying and a lot of other things we do. That's a cultural difference from a lot of menswear brands where the founders came from FIT and can create cool silhouettes and beautiful Instagrams. We're much more rooted in ‘How does it work? And what's the math?’”

For example, Skerritt and his senior designer, Chris, can argue back and forth over which white fabric is best. Or they can look to the data, see the customer reviews, and make decisions based on that information. “We don't have to debate,” he says. “That process has allowed us to incrementally improve our core fabrics. It's totally A/B testing fabric after people buy it.”

Mizzen + Main founder Kevin Lavelle admits that his company hasn’t made big investments in tech. “We don't have advanced AI or advanced machine-learning as much as that's starting to become an industry buzzword,” he says. (Everyone I spoke with shared the opinion that while everyone in retail wants to talk about the value of AI and machine learning, the reality is that the systems aren’t yet advanced enough to be useful.) But his company has a handful of ex-consultants and planners with buying backgrounds sifting through buying patterns, looking for patterns and trends.

One thing they noticed: At first, customers were buying year-round basics. Then they shifted to more seasonal wear, and now they are back to basics. Lavelle attributes this to his company’s growth: The first adopters wanted the initial offerings, then decided they wanted everything Mizzen + Main produced (hence the seasonal), but now a second generation of shoppers are getting introduced to the company and are focusing on the staples.

These companies are finding a niche, but the questions remains of how big can they become. Lavelle thinks the target addressable market is “tens of millions of customers, and growing.” Skerritt believes Proper Cloth can reach the whole dress-shirt market, a $3 billion industry. Those are the lofty statements of founders, the type of market venture capitalists love. They are also outsized dreams, the pie-in-the-sky ideals that aren’t out of the question but are unlikely. Still, there’s a market here.

“Are they looking to become billion-dollar companies? I'm sure they'd love that, but I think they'd be very comfortable with a $100 million valuation,” Paul Munford, founder of industry tracker Lean Luxe, says. “As the general consumer is getting a little smarter, they are looking for more specialized options. That base is big enough to support these companies so far.”

The idea is to grow the base. Ledbury, for example, started out poaching laid-off Lehman Brothers bankers from the top of the market. Now that it’s exhausted that space, it is looking elsewhere. “Now our big push is, how can we get the Brooks Brothers guys, the guys buying $100 shirts, to spend another $50 on something we think is going to fit better, feel better, and last longer?” Trible says. “As the market has gotten better and the male consumer has gotten comfortable with researching a bit about clothes, they are discovering that they'll pay a $50 premium for something that will fit better, last longer, and feel better.”

They are looking beyond major metropolitan hubs as well. Proper Cloth sells 95 percent of its shirts in the U.S., but just 20 percent in the New York area. While Skerritt says San Francisco, Boston, Los Angeles, Seattle, and Washington, D.C., are also popular locations, “we have a surprising number of customers outside big cities.”

Trible sees a similar pattern. Ledbury, along with Mizzen + Main, Proper Cloth, and Untuckit, have started opening retail shops around the country. They are using data to help determine where their customers are and where the highest conversion rates are, guiding where the shops should be.

But ultimately, these are online business, lean, agile, and flexible. If there’s a danger, it’s growing too big, too fast. (Looking at you, Kit and Ace.) Untuckit’s $30 million in venture funding is a lot of money, which comes with the expectation of outsized investor returns. That’s a dangerous position to be in, since as much as these brands want to consider themselves “tech” companies, they aren’t. They are retail brands. A 100x return simply isn’t reasonable; scaling too fast is worse than not scaling at all. Proper Cloth’s 100,000 shirts at $95 per shirt represents $10 million in revenue. That won’t set the world on fire, but it’s a good base from which to build. Outward rhetoric aside, scaling back ambitions is sometimes the smartest thing to do.

Because ultimately, this is a simple business: It’s about getting a guy to buy once, then a second time. Ledbury’s analytics show that a two-time buyer is 70 percent more likely to return a third time. It’ll send emails at specific points over a 52-week period to try to encourage that second sale, creating custom campaigns based on the data they’ve gathered over the years.

“Men are loyal,” Trible says, noting that its top 100 customers all have more than 100 shirts and that one person has purchased 430 shirts. (He buys two of everything; one for each of his houses.) “It's a simple business: We sell shirts. If we can create great value and take care of people, they should come back for the next 10 years or so.”