Heading to the beach this Labor Day weekend? Chances are you’ll see Tommy Bahama branded chairs, umbrellas and other paraphernalia littered on the sand.
Having started selling men’s silk Hawaiian shirts in 1992 and then branching out into a wider range of home furnishings, restaurants and more, this tropical kitsch brand is now almost everywhere along the ocean, from Florida to California to New Jersey. .
“Tommy Bahamas is a lifestyle brand, and beach chairs help enhance your sun and vacation ideas.”You can see them on most major coastal beaches during the summer.
The brand has developed a licensing strategy with major outdoor equipment manufacturers, access to Costco’s 60 million-plus members, and improvements to chairs since its debut in 2009, including backpack straps and extra pockets to hold sunscreen and smartphones. We have conquered the beaches of America thanks to our new features.
Oxford Industries’ Thomas Caldeco said on Thursday’s earnings call that Tommy Bahama’s sales were buoyed by the “return to leisure and holiday travel and the permanence of a very large number of people to a warmer climate” during the pandemic. He said that it is also rising from the “movement of
Tommy Bahama does not make chairs or beach equipment. They are manufactured by ShelterLogic Group, a leading manufacturer of outdoor and beach products, which also manufactures RIO Beach branded chairs and other huts, tents and camping equipment lines.
In return, Tommy Bahama licenses the name and design of its beach goods and receives royalties from retail sales. This licensing strategy means Tommy Bahama can increase customer exposure to the brand without incurring production or advertising costs.
Yruma says the beach chair itself is “an incredibly powerful marketing tool.”
There is no public market share data for beach chairs, but Rob Silinski, president of ShelterLogic Group, estimates that Tommy Bahama controls 80% of the market for chairs over $30.
Tommy Bahama’s unexpected success story.
The man who oversaw the launch of the chairs in 2009, almost 20 years after the company started, never imagined customers would buy them.
“I’d rather be lucky than good,” said Doug Wood, the brand’s president at the time and now CEO.
At the time, Tommy Bahama was struggling.
The founder positioned the brand as a fashion line for country club men. They were “Ralph Lauren diehards,” his co-founder Bob Emfield said on this year’s podcast about the brand’s target audience.
They were trying to create a design reminiscent of “sun belt and dress down”, and set out to use the name of an island close to the mainland United States.
“Hawaii was beaten to death,” he said. So they came up with the word ‘Tommy Bahama’ because I liked the sound of those two words of his.
The founder had recently left the company and the country was suffering from the Great Recession, with Tommy Bahama’s sales plummeting.
“We were a silk-based company known primarily for flowers It’s a men’s camp shirt,” said Wood. “We had some swimwear on the line. No one thought of us as a beach brand. We were dressier than that.”
So when Tommy Bahama executives pitched Wohaod the idea of working with SimpleLogic to sell licensed chairs at Costco, Wood didn’t think it would work.
But the brand needed cash, and Costco was quickly guaranteeing about $250,000, so Wood reluctantly agreed. “It continues to sell at an incredible pace.”
After success at Costco, Tommy Bahama expanded distribution to other chains such as Amazon and Walmart. Today, Tommy Bahama releases a new chair each season and emails subscribers en masse when it debuts.
Costco (COST) Chief Financial Officer Richard Guaranti said the company is “selling a lot” of Tommy Bahama chairs in its stores. “This is a year-round product.”
Although the brand does not split revenue from the business, Tommy Bahama sells up to 2 million chairs and 700,000 umbrellas annually, Galanti added.
The company’s most popular product is the $89 Wavy Marlin Deluxe reclining navy blue aluminum chair with a built-in cooler, padded backpack straps, and neck rest. Costco, Amazon, and other chains sell more basic versions for around $40.
In recent years, ShelterLogic has expanded the Tommy Bahama line to children’s chairs and off-the-ground chairs designed to make it easier for seniors to get up.
As a result of the chair’s popularity, Tommy Bahama has expanded into an entirely new business centered around beach gear and more recently into women’s swimwear, coolers and t-shirts.
“We can now build businesses that never existed before,” says Wood.