The Basics
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- Company: Buttercloth Shirts
- Owner: Danh Tran and Gary Falkenberg
- Asking Price: $250,000 for 10% equity
- Final Deal: $250,000 for 25% equity
- Shark Who Took The Bait: Robert Herjavec
- Season/Episode: Season 10, Episode 4
Buttercloth Shirts Before Shark Tank
Danh Tran was born in Vietnam but now lives in Long Beach California. Since he was a young boy, he had a passion for fashion design and has spent his life’s savings working toward that dream.
He’s developed a line of dress shirts that are ultra-comfortable but still look sharp and presentable. He’ll ask the sharks for $250,000 in exchange for 10% of the company he calls Buttercloth Shirts.
Buttercloth Shirts On Shark Tank
Danh approached the stage with one of his advisers, Gary Falkenberg (who’s a friend of Buttercloth’s COO). They began their pitch with Danh telling the group that he always hated dress shirts because they’re usually stiff and scratchy. His Buttercloth shirts, in contrast, “Make you feel like you’re wearing your favorite t-shirt, but make you look like you’re fully employed.” The sharks liked that line.
Gary told the sharks that the shirts were made of 100%, sustainable, long-fiber cotton, but both Gary and Danh wanted to bring out their “scientist” to explain more. Their scientist turned out to be a former NBA player, Metta World Peace, wearing a white lab coat over a Buttercloth shirt. He talked about the fabric’s 6-way stretch and breathability, and then easily dunked a ball through a basketball net on stage. Metta then passed samples of the shirts to the sharks so they could touch and feel the fabric. All of the sharks said that they felt nice and soft.
Kevin remarked that the three of them were quite an eclectic group, and wanted to know how they got together. Metta, who has a college background in math, had been interested in marketing products and was so impressed with Buttercloth that he was motivated to get on board. Gary explained how he had met Danh through his friend, and then Danh told his story.
Danh had grown up in Vietnam, where his parents were tailors. As a 10-year-old boy, Danh began making his own clothes, but his mother warned him not to pursue a “poor career” in fashion. She preferred that he become a doctor or a lawyer. But Danh didn’t want to give up his dream of becoming an American fashion designer. He came to America and intended to apply to Otis College of Arts & Design, but the tuition was $120,000, which was too steep for him.
Instead, he started working for Mattel, where he designed clothes for Barbie dolls. After working there for five years and saving his money, he was able to attend fashion school and earn a BA in Fashion Design. That degree led to other jobs as a designer, including one as head designer at Affliction Clothing, where he worked for ten years.
Charles Barkley asked the first questions about the shirts: What was the retail cost and where was it being sold? Danh replied that the shirts retailed between $98 and $118, and all sales were made online. Mark asked what the shirts cost to make, and Danh told him around $20-$25.
Charles asked how many had already sold, and Danh told him they had earned $500,000 in sales over a period of seven months. The sharks thought that was impressive. But Charles had more questions. He wanted to know how the company was reaching the public. Gary spoke up and said they were on Facebook and Instagram. And that’s when Robert asked how much money they had spent running the company.
Danh admitted that he invested $240,000 of his own money, and had quit his job, sold his house, and cashed out his 401K. He was all in.
Kevin wondered what was the cost of customer acquisition. Gary revealed it was $40 per customer, and it was clear that Kevin and Robert thought that was too high. But Robert continued questioning Danh and asked him what they would do with the money they’re asking for. Gary said that two-thirds would be devoted to inventory and one-third for additional marketing.
Kevin then said they needed to hire a company to reduce their customer acquisition costs. After saying that, he dropped out. Mark was also focused on customer acquisition costs and wondered why they were budgeting more money for inventory than for marketing. He felt they definitely needed to focus on advertising rather than on the product at this point. He dropped out.
Lori had already started working in fashion, trying to develop a line of clothing that she could wear and market on the show. She didn’t think it was fair to get involved with another fashion company, so she dropped out. And Charles’ take was that the fashion business was too cutthroat, and he was not willing to put up any money. He was out, as well.
That left Robert as the last shark remaining. He admitted he knows a lot about the fashion space and that he knows people who could work with Danh to help him perform better online. Unfortunately, he wasn’t willing to invest for only 10%. He wanted 25%.
Danh tried to counter with 20%, but Robert wouldn’t budge. There was just too much of a risk and he had originally planned to ask for 35%. Danh thought for a moment, and then accepted Robert’s offer. Danh was so excited he jumped up and down several times with glee. That made the sharks smile.
Final Deal: $250,000 for 25% equity
Buttercloth Shirts After Shark Tank
After the episode aired, there was a sales surge for Buttercloth. Before appearing on the show, the company had sold $500,000 in seven months. After, it sold $500,000 in just two weeks!
A year after the appearance, the company had been transformed. They now had an office, a warehouse, and a team to handle design, marketing, customer service, logistics, and accounting. Their forecast was to sell 50,000 shirts in 2019 and double that in 2020.
As for product selection, they intended to add polos and sweaters in 2019, but a visit to the website shows they’re not featuring sweaters right now. In 2020 they plan to add henleys, tees, and jackets to their collections. They were also planning to introduce a shirt with a new fabric technology that would actively cool the body.
Buttercloth had also wanted to start distributing to brick and mortar retailers in 2020, but it’s likely the coronavirus pandemic has halted that effort. But Buttercloth is offering reversible face masks in four different designs that should be as comfortable and breathable as their shirts.
The Buttercloth Instagram account has close to 17,000 followers and there are 7,600 likes on Facebook. Plus, the reviews are predominantly on the positive side. So does a Buttercloth shirt really feel like you’re wrapped in a hammock in the Caribbean under a palm tree, but look like you’re giving a keynote at NASA? It might be worth it to find out.
Disclaimer: The information provided in this article is strictly informational; INSIGNIA SEO is not affiliated with Buttercloth, SharkTank, or any of its subsidiaries.