Legendary management guru W. Edwards Deming famously said, “In God we trust. All others must bring data.” That’s particularly germane in these confounding times when the typically reliable data-driven economic indicators provide vastly different reads on the future. Instead, we need to turn to other indices to weigh the scales for our predictions.
Whatever the Measure
Such is the lipstick index which holds that rising sales of women’s lipstick signal an economic fall. For men, the underwear index goes in the other direction, i.e., slowing sales marks a downturn.
The underwear index was one that Alan Greenspan relied upon, according to NPR correspondent Robert Krulwich. “He once told me that … the garment that is most private is male underpants, because nobody sees it except people in the locker room, and who cares? So, on those few occasions where it dips, that means that men are so pinched that they are deciding not to replace underpants.” We reserve judgment that the only people who see men’s underwear are the locker room boys.
Beating the Odds
If the men’s underwear index is a reliable guide, then we have nothing to worry about in the economy, according to CEO Tom Patterson of Tommy John. “We’ve been profitable every year we’ve been in business.”
Now celebrating its 15th anniversary, the company got its start with a very intentional mindset to disrupt the men’s underwear business. But at the beginning, it didn’t look promising. Founders Patterson and wife Erin Fujimoto knew nothing about the fashion business, product merchandising or distribution.
They also launched during the 2008 recession with a premium product line where the price point for one Tommy John t-shirt or boxer short was as much or more than men were used to paying for a multi-pack of Hanes or any other mass underwear brand. “We took a problem-solving mindset to the category and asked a lot of questions,” Patterson explained.
Born Out of Necessity
Prior to founding Tommy John, the couple was pursuing individual executive careers, Fujimoto in finance and Patterson in medical sales. And they were satisfied in their careers, but neither was what they’d called delighted. They itched to do something more meaningful and personally rewarding. “We wanted something outside of corporate America,” Fujimoto said. Searching for her next step, she launched an online organic beauty product business as a side-gig, but ultimately ran out of steam running it.
Patterson was also feeling the urge. “I was good at my medical sales job, but I didn’t want to wake up 20 years from now with regrets that I didn’t try something different.”
Meanwhile, they caught an episode of Danny Deutch’s “Big Idea” show when he advised viewers if they experienced something that constantly annoyed them day-to-day, they should pause on that because that might be their big idea.
Patterson did just that. He paused on his constant irritation with undershirts. “I was buying fitted suits and button-down shirts, but my undershirts were boxy, stretched out, got stained in the armpits and didn’t stay tucked in. They made me look and feel worse, not better, so I thought there had to be a better way to make a men’s undershirt.”
To test his idea, he went shopping and came home with bags of samples but found nothing that solved his t-shirt problem. So, the couple set out to make a better t-shirt, getting their inspiration from innovations in the women’s underwear category. “Men’s underwear was still trapped in the Mad Men era. We wanted to bring it up to date,” he continued.
They bought some lightweight, stretch fabric, took it to a local dry cleaner’s seamstress, and asked her to make a t-shirt to their specifications, custom fitted to Patterson’s body. A week later, they had a prototype that fitted Patterson to a T and solved all his problems with conventional t-shirts.
To test the concept further, they asked her to make five more to share with friends, who loved them and asked for more. “I liked it, my friends liked it, so I figured there were probably thousands of other people that would like it. We were changing the status quo in men’s underwear that guys just dealt with and didn’t know there was a better way. We thought we’d found our business,” he shared and appropriately named it after himself, who was christened Thomas John.
Meanwhile, the couple kept working their full-time jobs until Patterson got a pink slip when the recession hit in October 2008. So, the business idea that had been germinating on the back burner became priority number one. Fujimoto used her experience from setting up the online beauty business but kept on with her day job until the business proved sustainable. That came about a year in.
Slow, Steady Wins the Race
Tommy John was an early adopter of online retail, but it couldn’t rely on it alone back in 2008. At the time, online and other direct-to-consumer channels accounted for only about six percent of retail, whereas today it’s approaching 20 percent. In 2008, wholesale distribution was required.
“Our big break came when we got into Neiman Marcus, followed by Nordstrom. They understood the big delta between the men’s and women’s underwear category,” Patterson said. And because the Tommy John products were so innovative, Patterson found his experience explaining technical advances in the medical products field transferred seamlessly to selling men’s underwear. They had to be great storytellers to cut through the traditional mindset.
“The first year and a half, we traveled to some 90 stores, doing product knowledge seminars, and talking to salespeople part of the week and then we’d be back in Los Angeles folding shirts, putting them in boxes and shipping them out. There was so much we didn’t know; like how complicated it is to create a UPC sticker, but we just took it one step at a time, learning the business from the ground up by doing it all,” he continued.
They also took a different path in marketing. “Fast forward to 2012, and we discovered we couldn’t compete with Calvin Klein or Under Armour at wholesale. We needed to find a path of least resistance to grow faster through a direct relationship with customers.”
They sent samples out to a number of celebrities. Kevin Hart was an early adopter and became a business partner in 2016. And Howard Stern gave it free airtime on Sirius XM when he said he couldn’t imagine a day with his Tommy Johns. That endorsement unlocked the potential of radio to reach customers in a totally new way.
“We discovered how to reach guys through their ears while driving their cars. That’s where we could have an intimate minute explaining how we created solutions at Tommy John,” he said. “And we could have fun there too, like our no-wedgie guarantee. We were able to talk about the uncomfortable truths in men’s underwear in unexpected ways.”
Comfort Is Key
With Tommy John well established in the men’s underwear category, the next logical step was to turn attention to women’s, something they had repeatedly considered over the years. In 2018, they decided the timing was right.
“We started hearing from women who were shopping for Tommy Johns for their husbands and sons asking when we were going to make something for them. Eventually, it became loud enough that we decided to go for it with a slim assortment using the same lens of innovation and functionality,” Fujimoto explained.
“It was ironic that women’s underwear was our initial inspiration for our menswear line, and it took us so long to get into women’s,” Patterson adds. Now it has become the company’s fastest-growing division.
And the pandemic lockdowns gave the company an extra boost. The company’s expanded its range into pajamas and loungewear and picked up steam as people leaned into comfort. “We’ve learned each division of our company has its unique voice, but everything we offer solves those uncomfortable truths nobody else talks about. That is the core DNA of our brand,” Fujimoto added.
Today, wholesale distribution remains an important channel of distribution with Tommy John product in over 3,000 doors. But the majority of sales are now via direct-to-consumer channels. And the company has moved into physical retail with five branded stores in Charlotte, Nashville, Scottsdale, Houston, and Southlake, TX, and three more slated to open by year-end.
Over the years, the couple has been wary of relying too heavily on venture capital, preferring to be the masters of their fate. But last year, they brought in an investment from LNK Partners, with partners Manny Chirico and David Landau joining the company’s board of directors. “The comfort category has emerged in a powerful way over the last two years,” Chirico said, who was formerly CEO of PVH Corp. “I’m so impressed with how Tommy John has navigated this moment as a leader in comfort.”
“We are hyper-focused right now,” Fujimoto said. “We’re only 15 years old, which is still super young. We can do so much more by hunkering down and bringing pure innovation with new concepts for him and her and experimenting with new categories.”
And Patterson adds, “We were forced to be different from the start, and that has been the path to our success. At the same time, unlike many other startups that take on early investors and build out too fast with expectations that profits will come down the road. We have been profitable every year since we’ve been in business. Ours was a profitable mindset from the start versus being profitable someday.”