Secrets of Growth

Men's underwear leaves the Stone Age

January 27, 2012: 11:25 AM ET

Entrepreneurs like Tommy John's Tom Patterson are looking to take advantage of a growing market of increasingly fashion-conscious men. First stop: underwear.

By Colleen Leahey, reporter

FORTUNE -- The days of over-sized jeans sagging from the derrieres of men everywhere are no more. Skinny jeans, tailored pants, and fitted oxfords are de rigeur, leaving little room for excess fabric in the undergarment department. Boxers or briefs used to be the only question men needed to ask themselves, but today, the options have grown.

Five years ago, Tom Patterson was a medical-device sales rep by day and an avid-viewer of CNBC's The Big Idea with Donny Deutsch by night. "All of the featured products or services … were created out of personal frustration," recalls Patterson. "I found myself constantly looking around, asking, 'What can I make better?'"

During the financial crisis, Patterson was laid off from a sales job he held for six years. During his down time, he realized that one of the biggest fashion annoyances he faced while he was working was a fabric gut -- that baggy bump just above the belt line caused by a loose-fitting undershirt.

After researching fabrics and designs of the bestselling undershirts at high-end department stores, Patterson came across micro modal. The patent-pending fabric is soft, with properties similar to cotton, but it doesn't shrink or yellow as easily. "I headed to my dry cleaner's with a design and paid him $100. Then ordered 15 more, asking trusted friends to wear them and give me feedback."

With positive reviews in hand, Patterson moved to San Diego with his girlfriend, locked down a manufacturer, and founded Tommy John. Today, the three-year old company offers its wares at stores like Saks (SKS), Neiman Marcus, and Nordstrom (JWN). Revenue over the past year was $1.5 million, up from $900,000 in 2010; Patterson predicts that 2012 revenue will be between $4-6 million. And this week, the company launched a new underwear line for men at Neiman Marcus and Nordstrom.

"Women's underwear is like the Jetson's. It's futuristic, innovative," says Patterson. "But men's hasn't been modernized at all." His company's brief line has a "Quick Draw" fly, which is horizontal rather than vertical, a ventilation zone, and no-rise legs. The fabric also allows stretching that keeps the briefs from riding up the wearer's thighs.

"Most guys have to wear different pairs at work and at the gym. These can be worn in both settings -- and even have a pocket for your iPod," Patterson says.

Patterson doesn't want to stop at underwear. Indeed, he is looking to tackle other men's intimates, like socks and robes. He wants his customers to deviate from the time-honored replenishment model -- buying new underwear to replace the old. Instead, he aims to encourage men (or women) to buy because they want the product, or need it with a certain outfit.

Tommy John is not alone in its quest. Industry giant Jockey is also changing their underwear game with a new "Stay Cool" line featuring Denver Broncos quarterback Tim Tebow as its spokesman.

"Guys are starting to look for functional benefits in underwear," says Jockey Chief Marketing Officer Dustin Cohn. The company's "staycool" line has some of the same breathable features NASA astronauts enjoy in their space suits. "I think guys are catching up to women in intimates. Women are thoughtful about their clothes and what intimates make them look best. Men are becoming thoughtful, too."

Cohn says Tebow was an ideal face for its new line, arguing that he appeals to both men and women. "[Tebow] is an authentic and honest athlete, appealing to the guys. The women like his personality and good looks." With its large consumer base, Jockey certainly wouldn't mind seeing the replenishment model fade.

In recent years, men's fashion in general has undergone a significant shift, says Marshal Cohen, chief industry analyst at consumer market research firm The NPD Group. "Over the past two years, men have become more concerned with fashion than they have been in several decades -- since the '70s."

Today, Cohen says, men's products are being designed for specific applications. "Male consumers are being told this is the style and this is the product you need for X activity." Cohen cites Under Armour (UA) as a good example of a brand that has done a good job avoiding the typical undergarment business model.

As for smaller companies like Tommy John versus behemoths like Jockey, Cohen argues that there's room for both. "There are two windows of opportunity in the market. Be unique and different and market to a higher-end customer. Or be so unique and different that consumer's recognize and want your brand."

So is a Victor's Secret in the offing? Cohen says we shouldn't hold our breath, adding that the men's intimates market, while growing, is still half the size of the women's market.

To be sure, men's underwear is leaving its Stone Age. And small companies like Tommy John should not be taken lightly. "Do I think a small player with a lot of innovation could make an impact on the market? Yes."

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