How the Perfect T-Shirt Became the Perfect Money Maker for DTC Brands

After entrepreneur Mike Natenshon's girlfriend threw away his favorite T-shirt, he founded a brand to create the perfect replacement.

Marine Layer launched in 2010 with a single product: a multi-colored striped T-shirt, Natenshon hoped, that would evoke the feeling of ease and California comfort he got from his old favorite. More than a decade later, Marine Layer now sells a full line of products like outerwear, sweaters and pants, but men's T-shirts remain a major sales driver. In the past two months, the company introduced two new T-shirts, a $54 fitted crewneck and a $48 lightweight hemp cotton T-shirt and expects T-shirt sales to exceed overall year-over-year sales growth in 2024.

Marine Layer is just one of many DTC clothing brands that have built a profitable business on the premise of selling the perfect men's t-shirt. Brands like Buck Mason and True Classic make t-shirts that fall somewhere between the five-for-$22 Hanes t-shirt packs and the $100-plus luxury tees from brands like James Perse. They have managed to turn a staple item that shoppers can buy anywhere into a profit source by constantly updating their fabrics and silhouettes to appeal to male shoppers who wear t-shirts more often and constantly browsing Internet for a version that fits their aesthetic sensibilities. .

The quantity of men's t-shirts available in the market, which includes products from DTC, luxury and mass-market brands, increased by 42% last year, and weekly searches for this item increased by 12%. over a year this month. according to data company Trendalytics. As a result of this growth, brands that have invested in their men's t-shirt offerings are seeing robust repurchase rates, a critical benefit in an era where finding new buyers is expensive and difficult. At Marine Layer, the retention rate for t-shirts is at least 10% higher than other categories, and the company generated more than $10 million in earnings before interest, taxes, depreciation and amortization in 2023. The company's sales grew 30% annually. over one year to more than 150 million dollars. True Classic also grew 40 percent last year to $207 million in sales and is targeting a $1 billion valuation.

E-commerce has actually made men's shopping behavior much stickier, said Mo Zhou, a venture capital partner at investment firm Global Innovation Capital. This has led many male buyers to be more loyal to their specific brands once they find them.

These brands have also found a path to profitable growth at a time when many of their DTC peers are in crisis mode. Sportswear brand Outdoor Voices closed all of its retail stores last month and is reportedly considering filing for bankruptcy. Sneaker seller Allbirds' sales fell 15% in 2023 and its stock has been trading at less than $1 for more than a year; Nasdaq warned that if it failed to increase its stock price within six months, it would be delisted.

The success of these brands lies not just in the t-shirts, but rather in their ability to build a community of ardent followers, invest in improving the quality of their t-shirts, and expand into categories that complement their flagship product.

Anyone can have a t-shirt made quickly. It's not difficult, said Anthony Choe, founder of investment firm Provenance, an investor in Marine Layer. The hardest part is doing something different that gets people interested and noticed.

Cultivating Loyalists

Having a flagship product as accessible and ubiquitous as a t-shirt means brands need to pay attention to detail in order to stand out.

For Marine Layer, that meant focusing on its multi-colored stripes, while Buck Masons t-shirts are known for their signature curved hem. To retain customers, these brands regularly present new models and experiment with fabrics.

Over the past 18 months, Marine Layer has accelerated its rollout of t-shirts in new materials. Since its launch earlier this year, the new natural hemp cotton t-shirt, meant to look soft and worn, has seen sales volumes comparable to Marine Layers' best-selling $48 signature tees at during the same period.

We obsess over the details of the t-shirt and really try to present the different use cases, Natenshon said. We are always trying to find new features.

At Buck Mason, where T-shirt sales are growing more than 40% year over year compared to all of its other product categories, customer loyalty comes exclusively from updating fabrics and popular silhouette colors like its original $45 Supima cotton t-shirt. The 11-year-old brand used its profits to purchase a knitting factory in Mohnton, Pennsylvania, in December 2022 to gain greater control over how quickly it can update and improve its materials. Buck Mason launched its Toughknit T-shirt made from U.S.-grown Supima cotton jersey last September and will launch a line of indigo-colored T-shirts in the coming months, said co-founder Sasha Koehn.

If you haven't spent much time refining this [original] article, it won't lead to increased sales, said Yasunobu Kyogoku, founder of Innovation Global Capital, which has invested in Marine Layer, Buck Mason and shoe maker Rothys.

More than a t-shirt brand

Brands in this industry cannot survive just by selling t-shirts. Although men's t-shirts are an important driver of customer loyalty for Marine Layer, they currently represent only 18% of its overall men's product assortment, according to data analytics firm Edited. The most successful startups have diversified their product offerings to increase sales, finding that t-shirts are often a gateway to getting customers to purchase items in other product categories.

You can sell a t-shirt and if they like it, that's great. They could buy three more. But if you don't have more to offer, it doesn't really matter, said Innovation Global Capitals Kyogoku.

Since its launch, True Classic has sold most of its t-shirts in three, six and nine packs ranging from $60 to $130, which meant some customers were taking a full year before purchasing a new pack. In early 2023, the brand began offering items from new categories, like its $20 boxers, to customers who spend more than $150 in a single transaction, in order to encourage customers to purchase more products in those categories, said Ryan Bartlett, True Classics co. -founder and general manager.

When launching new products, some brands ensure that these items have a more direct link to their flagship product.

Marine Layer, for example, uses similar fabrications to what it uses for its t-shirts aimed at other categories. In February, the company launched its $178 Saturday Breeze blazer and matching $128 chino pants, developed in a similar cotton-spandex blend found in its tailored crewneck tees. These have helped drive sales of t-shirts, blazers and chinos, which are often purchased together. True Classic, meanwhile, plans to launch a line of women's t-shirts in the last quarter of the year; she expects women's clothing to account for at least 40 percent of sales in the coming years.

Once you have a product that the customer likes and is excited about, then you have the customer's approval to try to offer something else and the main thing is that it's the right thing, Kyogoku said. If you continue to exceed their expectations, customers are always satisfied.