True Classic started in August 2019 when Ryan Bartlett spotted a gap in the market for a premium t-shirt brand.
In the men’s t-shirt market, on one end of the scale, there were the Hanes and Fruit of the Loom style brands offering basics at very low prices. Then on the upper side of the scale, you had brands like James Perse selling tees for $50-60+.
Ryan found a gap between the two — a premium brand selling tees designed to help men look and feel good.
A flying start
In its first month, True Classic generated $2,500 in sales. In month two, sales grew 10x to $25,000. By May 2020, the business generated nearly $500,000 per month in sales. This incredible early growth rate came from having a great product that customers loved and investing their marketing dollars efficiently.
On the product side, True Classic tees were made specifically for men. Made from stretchy, comfortable fabric, they’re a little tighter on the arms, and looser around the belly. When it comes to marketing, True Classic mastered the art of efficiently sharing its messaging across Facebook, TikTok, and Youtube.
“The company grew really, really fast,” explains True Classic CFO Gary Cooperman. “But there’s always been a strong philosophy that we would be profitable all the time.”
True Classic's operations were designed to be lean yet effective. "We've stayed efficient on the operating expense side of things," says Gary. "We are profitable on our first customer order, which is unique in the apparel space and direct-to-consumer [eCommerce]."
Scaling inventory to meet customer demand
True Classic is an incredibly ambitious business. Since its launch, the brand has generated over $200 million in sales — and they’re only just getting started. But with big growth targets comes the need to place larger inventory orders.
With ongoing supply chain issues, True Classic decided to bring in more inventory than they would normally. “Generally, in the apparel space, you want to carry between 15 and 20 weeks of inventory at any given time," says Gary. "Because of our growth trajectory — we're growing 300% year over year — we needed enough to support that growth [with larger orders]."
Placing larger orders was no stress for Gary, because True Classic’s products are evergreen. Unlike other apparel companies that might stock seasonal products that go out of style, True Classic’s apparel sells year-round. Gary knew the product would sell. The main issue was cash flow and the ability to pay for the larger-than-normal orders to mitigate supply chain issues and support the brand's growth.
“We have months where we were breakeven, or maybe we lose a little bit, but generally, the business is profitable,” explains Gary. “So to the extent you're growing the business; generally, you bring in more inventory than your cost of sales in any given month. From that standpoint, there was a need for cash."
Every eCommerce business runs into this issue — you need more cash to buy inventory than you have on hand. To solve this problem, True Classic started working with Wayflyer.
"What's really nice and refreshing about Wayflyer is they understand our business," says Gary. "A traditional bank is all about 'what if you go bankrupt?’ and ‘how do I seize an underlying asset if things go bad?’ In contrast, my discussions with the team at Wayflyer are more about our growth prospects. It's been phenomenal in supporting our business and growth."
Funding from Wayflyer has enabled True Classic to buy enough inventory to support the growth of the business — even throughout the Q4 shopping season when demand goes through the roof. “In the holiday period last year, we were very successful during the Black Friday/Cyber Monday week,” explains Gary. “However, we ran out of inventory in many different categories. Had we had the relationship earlier, we would have generated a lot more sales,” he adds.
Reflecting on the success True Classic has experienced this year, he remarked “Wayflyer has been an instrumental part of our growth story.”
The relationship and ability to scale inventory orders to match its growth ambitions have generated some incredible results for True Classic. “This year, $20 million plus in incremental revenue will have been generated because of the relationship with Wayflyer. I can say that with confidence,” explains Gary.
Expanding with confidence
Sustainable, profitable growth is difficult to achieve in eCommerce — its relationship with Wayflyer has enabled True Classic to scale while staying true to its growth ethos and focus on profitability. “Being a DTC company, we have a very lean operational model. Without the Wayflyer relationship, we would be more cautious with capital expenditures. But probably more importantly, we'd be more cautious about the inventory,” explains Gary.
As True Classic grows, it's expanded into new categories like jeans, denim, outwear, and underwear. With each expansion comes new suppliers, because vendors that make the best t-shirts aren't also the best in the world at denim or underwear.
“Those new vendors don't know us. So it’s usually a deposit upfront, with shorter payment terms,” Gary expands on building relationships with new suppliers.
Without the cash flow headaches inventory orders usually cause CFOs, Gary and his team are free to negotiate deals that are better for the business's profitability. "We can search out vendors with better pricing, but maybe not as favorable terms," he explains. “Having access to capital enables me to pay those vendors before I bring the inventory in, which works for all of us,” adds Gary. “Being able to do that has been instrumental in our growth.”