20Jeans gets $1 million to prove that there's a market for basic men's fashions
Unlike women, men have limited options for finding affordable fashions online. There are plenty of sites to get premium brands at a modest discount, but, surprisingly, the options to build a basic wardrobe without breaking the bank are few and far between.
This is the niche 20Jeans intends to fill, and the Los Angeles startup has raised $1 million to make it possible. If Bonobos is the online equivalent of Banana Republic, then 20Jeans is the Web’s H&M (for men). 20Jeans is a member of the Spring 2013 class of the Amplify accelerator and its Seed round included Baroda Ventures, Plus Capital, and Siemer Ventures, as well as angels, Paige Craig and Dennis Phelps. That is in addition to the first $200,000 which founder and CEO Corey Epstein put up himself after leaving a management consulting job to start the project last fall.
“Our model is predicated around solving the problems of stylish guys who don’t care about brands,” Epstein says. “We want to be a source of stylish, on trend, but not over the top basics, at prices that are palatable.”
At $20 for most items, hence the name, and just $60 for its most expensive outerwear, 20Jeans clearly beats sites like Bonobos, Fourth and Grand, and Frank & Oak on price. But its on consistency and ease of use that it beats flash sale platforms like Jack Threads and Gilt. Because 20Jeans private labels its fashions, the collection has a consistent style and cut. That means that when you buy a pair of jeans or a shirt that fits great, you can buy the same pair or something comparable again several months later. With the majority of other online discounters, this is anything but the case.
Given the low price points and the age old wisdom that men don’t make good fashion consumers, it would be easy to question the viability of 20Jeans’ business. But Epstein says, “We have great margins and could be bottom line profitable today if we weren’t investing so heavily in growth. It just shows you how much brand premium is built into other products, and how inefficient the traditional distribution model is.” Whether this is scalable enough to justify venture investment has yet to be tested, but the founder and his investors have been encouraged by the early results.
20Jeans is focusing on the 18 to 30 year old market, but has a surprisingly large number of 40 (and even 50) plus customers, according to its founder. It offers a broad line of products that includes denim, chinos, dress shirts, casual button downs, tees, shorts, hoodies, outerwear, and accessories. Consumers can shop according to product category, where items range from $20 to $60 with the bulk of choices at the lower end of that spectrum, or by viewing complete looks which are available for between $40 to $120, when multiple items are involved.
In the case of its “looks,” the company regularly uses members of up and coming bands as models for its photoshoots. Each look includes a brief profile of the musician and their style, and the photography is more real world action shot, than runway. The company carries this vibe through to its content strategy, publishing the Modern Mandate blog around topics like music, food and drink, lifestyle, and fashion. The bands and the lifestyle and entertainment publications in which they’re covered have become a key customer acquisition vehicle for 20Jeans. After all, it’s not like the average guy is browsing Pinterest, Polyvore, and Facebook in search of the hottest trend.
A large portion of 20Jeans’ product is sourced in LA, and tagged as such on the site. Denim, however, is imported from manufacturers who typically sell their product for $60 to $100 MSRP, according to Epstein, who says that he still makes a gross profit on his jeans. Even though it doesn’t manufacture all of its products, and some still don’t carry the 20Jeans brand, the company works directly with its suppliers to choose cuts and fabrics that make up its custom collection. On rare occasions, the company will buy designer closeouts, but that’s not its core business, and is typically done opportunistically.
“One of the challenges to combat is people’s assumed correlations between price and quality,” Epstein says. “People with this misconception may not end up becoming part of core customer base. But my friends and I could care less what’s on a label.”
There are no daily (or weekly) email newsletters at 20Jeans, and nary a discount, a subscription, or a celebrity endorsement in sight. Epstein is adamant about delivering simplicity, quality, and affordability in a package that’s tailor made for the way that unpretentious but style-conscious guys want to shop.
“Our target customers aren’t currently loyal to any brand, but they’re unhappy with their current options,” Epstein says. “That may be JackThreads, or it may be Marshalls and Loehmann's, all of which I believe, provide a horrible experience.”
Epstein isn’t the first founder to tout the cost savings of going direct to consumer and carrying limited inventory. It’s the same model employed by Shoedazzle, JustFab, BeachMint, NastyGal, DailyLook, and others targeting women. But from everything we’ve seen from those companies, this is an incredibly costly market to enter, including everything from acquiring customers to achieving unit cost efficiency in purchasing and fulfillment.
In many cases, the economics don’t start making sense until companies are generating multiple tens of millions of dollars in revenue. As much as brand and customer experience matter, none of it means much in terms of raw dollars and venture returns if the company can't get to a massive scale. 20Jeans has big ambitions, and a clear vision of how to achieve them, but at this point it's still a small fish in a massive pond.
20Jeans is currently just a 10-person team, handling all of its own fulfillment and customer service out of its LA garment district headquarters. This number will need to grow quickly in proportion to its sales, but at this stage, the young company is focused on getting in front of its target audience and gathering feedback on the product. The startup has already seen 10,000 customers place orders, after just six months in a quiet public beta, with 10 percent of these ordering more than 10 times.
There’s little arguing that Epstein has honed in on a real problem in the marketplace. The question is whether the current status quo has been dictated by fundamental economic factors, or whether 20Jeans can turn a profit while turning age old fashion industry assumptions on their head.