Startup finds its footing in socks trade
It’s a rare business meeting in which one of the participants lifts his leg onto the conference table, pulls back his pants and shows off a brightly designed pair of socks.
But it makes perfectly good sense for Nathan Demuth, who’s joined forces with college buddy Michael Garganese to launch What The Sock LLC in Reno.
The 20-something entrepreneurs are riding the emerging sock-crazy trend among consumers, but their approach to the fashion industry is anything but frothy.
They’re looking to turn the industry on its head.
Rather than make educated guesses about consumer tastes a season in advance, manufacture a bunch of clothing and hope it sells, Garganese and Demuth are asking consumers directly before they make a single item.
The inventory savings, they say, provide a cost advantage that keeps What The Sock competitive.
Starting early this summer, WhatTheSock.com has posted a handful of potential designs for socks on its Web site every few weeks. The designs are positioned as limited-edition fashion available only during a campaign that generally runs about 15 days.
If enough customers sign up, What The Sock tells its contract manufacturer to fire up the production line, bills the customers’ credit cards and delivers the socks about a month later.
If orders fall short — the current minimum is 150 — the customers aren’t charged. Out of the company’s first nine campaigns, only two have failed to reach the minimum.
All in all, says Garganese, WhatTheSock.com looks something like a crowdfunding Web site.
The freelance designers who contract with the company get a 5 percent cut on total sales of the socks they create, and Demuth says that stake gives designers a role in helping to build buzz around the site.
The socks business is growing rapidly. Sales of men’s socks last year, for instance, rose by 13 percent from a year earlier, says researcher The NPD Group Inc. While that’s providing some initial momentum for What The Sock, Garganese says the concept is easily expanded to other fashion and fashion-accessory lines as well.
Execution of the concept depends on the company’s ability to deliver merchandise quickly after the order-taking campaign closes. To do so, Demuth and Garaganese work closely with their contract manufacturer to allow a fast start to production runs.
While there’s little to prevent a competitor from jumping into the same space, Garaganese and Demuth are working hard to quickly develop a wide-ranging network of relationships with designers, and they’re going like crazy to develop a strong brand presence for WhatTheSock.com.
The company has done some advertising on traditional digital platforms such as FaceBook, relies heavily on Instagram and has developed relationships with fashion bloggers who talk up the company’s sock offerings.
Demuth and Garaganese tapped their own savings and brought in an investor to launch the firm, and the two founders have given up attractive day jobs — Demuth with Accenture, Garaganese with Google — to devote fulltime to the venture.
Both are graduates of the College of Business at the University of Nevada, Reno, where they met on the first day of their freshman year and began kicking around ideas for startup businesses not much later.
In addition, Argentum Law, the sister law firm of communications firm Argentum Partners, recently welcomed attorney Stacie Truesdell Michaels to its Las Vegas office.