Custom Ink became part of Washington’s digital start-up narrative by creating customized T-shirts that celebrate group bonds.
In two decades, co-founder Marc Katz built a nearly $500million business by transforming T-shirts from an article of clothing into an emotional keepsake. It became a large-scale business, attracting boldface-name investors including Ted Leonsis and Steve Case.
Custom Ink encourages customers to go online and design T-shirts honoring family reunions, milestone events, businesses, philanthropies, sports teams, religious groups and more. Think 50 T-shirts emblazoned with “The Smith Family Reunion” or 150 baseball caps for the local 5K.
Then the coronavirus crisis hit in March 2020 and sales slid 80percent within days. Like thousands of U.S. businesses slammed by virus shutdowns, Custom Ink had to figure out how to survive. It was forced to recalibrate and rethink its business as the pandemic took the world to a different place.
It was an especially difficult time for the business, which has shipped more than 125million T-shirts. “Our business is driving social togetherness, family outings, school activities and occasions,” Katz said in a recent interview. “That hit a hard stop with social distancing. We had a huge challenge that was aimed at the heart of the business.”
In a note to his staff — known as Inkers — after the pandemic hit, Katz acknowledged the precipitous drop in sales and that the situation could not go on much longer.
“This is the email I’ve been dreading to write .?.?. and I’m sure you’ve been dreading to read,” he wrote. He warned that the company might need to “take major action both inside the company and with our investors and lenders to ensure we stay in business” and raised the specter of furloughs and dramatic cost-cutting.
Within days, Custom Ink furloughed around 75percent of its 1,700 employees for at least two months. Senior leadership saw significant pay reductions.
It continued paying health insurance premiums for its furloughed team members, he said, and helped employees apply for unemployment benefits and access their retirement savings to see them through the crisis. Katz also offered interest-free advances and set up a hotline for employees.
“We tried to do the furlough as compassionately as possible,” Katz said.
That left the company with a skeleton staff to keep it going.
“There were so many questions about what’s going to happen in the economy and the world,” Katz said recently. “We had just seen our sales fall 80percent in a week and a half. A week and a half!”
Except for the T-shirt printing teams in facilities in Nevada and Charlottesville, the company went virtual overnight. Complex functions ranging from marketing to customer service migrated out of its Fairfax, Va., headquarters and into employee homes.
Production facilities had to be supplied with safety gear. Protocols had to be instituted. Vendors had to be notified.
With the news filled with reports of medical shortages, especially N95 masks, Inkers had an idea — sell cloth masks to reduce the demand for medical-grade supplies.
Katz loved it. He had just read an interview with a Chinese researcher who promoted masks as a way to stop the spread of the coronavirus. At the same time, the U.S. Centers for Disease Control and Prevention encouraged Americans to use cloth masks as a way to preserve the N95 masks for health-care workers.
“It sounds obvious now, but it wasn’t at the time,” Katz said. “We were ahead of the CDC. We lined up the first model of our mask, and by the time the CDC gave guidance, we already had the mask project going.”
Custom Ink took its T-shirt supply chain and turned it into a national distribution system for cloth masks. Tech teams worked round-the-clock to update the company’s site and fulfillment systems and sales. Marketing teams mobilized to offer new products to create revenue.
Every pandemic-related sales idea was on the table. Custom Ink sold work-from-home kits so client companies could help remote employees feel connected. They invented drive-by graduation gear for schools to share. Charitable T-shirt campaigns were updated to include a focus on the pandemic.
Katz said the company had to temporarily scrap its traditional marketing, which had been built around people throwing their arms around one another. “We adapted our marketing to new environments and to the safety messages people were consuming during the pandemic,” he said.
Custom Ink was soon delivering millions of cloth masks, with prices from $1 for a plain mask up to $8 for special designs.
Katz’s team made it so customers could go online and spice up their mask with colors, designs and logos. Custom Ink refined its products as it went, altering the masks for comfort, fit and style.
The marketing and technology teams built a free-standing “Mask for It” store to allow customers to express their personalities through their face coverings.
Katz declined to divulge hard numbers on mask sales, but he said they helped bridge the financial gap from the shutdown-related collapse in March to the gradual return of the core business over the spring and summer.
Over time, buyers shifted from generic cloth masks to custom masks with special colors and designs. Those went from a small fraction of unit sales in April 2020 to the majority of mask sales by midsummer, according to the company.
Mask revenue helped the company bring back its employees in August. Custom Ink is back to 1,600 Inkers.
“We lost about 10percent of our team along the way because people moved to be closer to family,” Katz said. “The vast majority stuck with us.”
The company finished 2020 only slightly behind its original sales goals.
“It’s not as much as we otherwise would have made, but we turned a profit,” Katz said. “We were very determined to see the company through this, and we ultimately did.”