business news in context, analysis with attitude

by Kate McMahon

What do Beyonce, Walmart, Red Sox slugger David Ortiz, a Shark Tank startup named Tipsy Elves and Lord and Taylor have in common?

All are cashing in on the ugly Christmas sweater craze this holiday season.

For the uninitiated, an ugly Christmas sweater can be garish, goofy, sentimental, retro, risqué – in short, anything but boring. According to the founders of National Ugly Christmas Sweater Day, celebrated on the third Friday of December, it’s all about shedding your corporate uniform and being festive from morning ‘til night.

Savvy entrepreneurs jumped on the bandwagon when Ugly Christmas Sweater theme parties became popular in the last decade and prices for kitschy apparel featuring candy canes, jolly Santas and jingle bells shot up on eBay. (I should know - my daughters were among the “lucky” bidders. I did not see the potential goldmine in the package, just the ugly sweater.)

Evan Mendelsohn did. He was a self-described “bored lawyer” in 2011 when he noticed a spike in online searches for ugly Christmas sweaters. He and a college buddy founded Tipsy Elves, nabbed $100,000 from Shark Tank two years later and the company has racked up some $20 million in sales.

Major retailers are now in on the action, and I find it interesting that Walmart is leading the pack. After seeing ugly Christmas sweater revenues climb for three years, Walmart this year increased its selection of holiday and novelty items by 40 percent. Noting that men were purchasing women’s sweaters in size large, there are now plenty of sizes for all. As Walmart apparel exec Deanah Baker told CNBC: “Customers just can't get enough of it, and the tackier the better. The more you can put on it the better it sells."

Lord and Taylor, the ultimate anti-tacky traditionalist, has partnered with Whoopi Goldberg this year for a collection of sweaters that retail for $139 – more than triple the average. According to Whoopi, her sweaters “aren’t ugly” - just fun.

Struggling JC Penney has dramatically expanded its assortment for 2016, after last year’s selection primarily for teens sold out early in the season.

Buoyed by the success of tacky sweaters last year, Target also decided to expand its offerings, and said it had purchased enough matching holiday pajama sets to dress a half a million families.

Among the celebs designing their own lines are Beyonce and Shaquille O’Neal. Note to Boston Red Sox fans: David “Big Papi” Ortiz’ limited edition sweater includes an expletive that makes it NSFW (Not Safe For Work) but proceeds go to his children’s charity.

Back to the retail front, I think the stores that moved quickly to capitalize on the trend will do well this season, and should already be thinking about where the category is headed next.

Ragstock, a Midwest chain that sells new and recycled clothing, is way ahead on that. Ragstock just launched a Swipe-A-Sweater app to make it easy for customers to surf its collection of 25,000 ugly Christmas sweaters. You answer a few quirky questions and the app chooses sweaters for you. Just like a dating app (I’m told), you can swipe right for yes, and left for no, until you find the new or vintage sweater that is just right.

I may just have to give it a try.

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