Sunday, December 29, 2019 How Tipsy Elves built a $125m ugly Christmas sweater empire Eight years ago, a dentist and a lawyer quit their high-paying jobs to make sweaters. Today, business is booming. BY CONOR GRANT ’Tis the season, in the words of a popular ugly Christmas sweater, to “Get Lit.” If getting lit is a sign of Christmas cheer, then holiday spirit is off the charts this year. Sloshed Santas and inebriated elves have been spotted drinking heavily,urinating in public, and pole-dancing on subway cars. And Santa himself isn’t missing out on the Christmas debauchery: On sweaters made by the ugly sweater company Tipsy Elves, Santa writes “Merry Christmas” inyellow snowand dances dirty in his Christmas “twerkshop.” Decades ago, Santa was a jolly old elf known for nothing naughtier than eating one too many cookies — and ugly Christmas sweaters were mostly just gifts from Grandma that ended up in the back of the closet. But today, Santa’s a hard-drinking horndog whoasks for nudes,poops down chimneys, andbrags about the size of his packageon millions of best-selling Christmas sweaters — and Christmas itself has developed a whole new tradition of unholy degeneracy. So, how did Christmas sweaters get so ugly? It all started with a lawyer, a dentist, and a dream Evan Mendelsohn wasn’t feeling very festive at the start of 2011. The 27-year-old had gotten business and law degrees and landed a job at a prestigious California law firm. But Mendelsohn quickly found that law school hadn’t prepared him for how boring it would be toactually practicelaw. “I spent hours talking with the partner or the supervising attorney about the meaning of one or two words,” Mendelsohn said in a recent interview. “And I had this sick feeling that this could be where I'd end up the rest of my life.” So he threw himself into side projects that scratched his entrepreneurial itch. He used SEO to create informational sites — like Day-Finder.com and How-Tall-Celeb.com — about highly searched topics. These started making big money, which inspired Mendelsohn to try to apply his SEO skills to something bigger. After scouring the internet for trending search terms, he found something interesting: Interest in the keyword “ugly Christmas sweaters” seemed to be rising. Google search traffic for ugly Christmas sweatersdoubledbetween 2010 and 2011 — and had 5x’d from 5 years before. ugly Christmas sweater partiesat a Canadian bar. selling upcycled ugly sweaterson eBay since 2008 under the name My Ugly Christmas Sweater, Inc. A company called Skedouche had been selling new, ugly sweaters since 2009. But Mendelsohn and Morton appeared to be the first to build an entire brand around ugly Christmas sweaters. Tipsy Elves’ first 50k sales came from SEO. Investing heavily in SEO upfront paid off for the Elves: As Christmas party-goers across the country scoured the internet for last-minute ugly sweaters, they almost always ended up in the same place — Tipsy Elves’ search engine optimized site. But Mendelsohn and Morton didn’t rest on their Christmas wreaths: As soon as they started making big money, the 2 entrepreneurs reinvested brand Tipsy Elves not just as a sweater company — but as a party-focused lifestyle brand. “Our goal since day one was to build a brand around Tipsy Elves,” Mendelsohn told us. “So it's not just the product we sell, but it's the mentality… celebrating events and holidays with friends and doing it in the most memorable way possible by wearing our products.” Tipsy Elves positioned their sweaters as the life of the party — both in real life andon social media— to advertise their irreverent vision of Christmas. Soon, their over-the-top branding efforts paid off: In 2013, Shark Tank asked Tipsy Elves to participate in the show’s upcoming holiday-themed episode, an invitation that offered the possibility of funding — and the chance to get in front of millions of eyeballs. on airwearing Tipsy Elves sweaters. That season was a record-breaking one for SantaCon. By then SantaCon had spread to 300 cities and search volume for ugly Christmas sweaters has doubledagain. But all that eggnog also started to raise some eyebrows. An op-ed published inThe New York Timesbefore SantaCondemandedNew York authorities “Bring Drunken Santas Under Control” to curb incidents of “sexism, drunkenness, xenophobia, homophobia and… public vomiting and urination.” But SantaCon went as expected: Bars filled up with people wearing Santa costumes and Tipsy Elves’s signature humping reindeer sweaters — and by the end of the night, drunken, Christmas-costumed brawls broke out in the snowy streets of New York. Tipsy Elves’ sales, however, were far jollier than expected: The company did $3m of sales in 2013. As it turned out, sex sells… even for Santa Tipsy Elves walked away from Shark Tank with $100k, the first and last funding they’d ever take. They simply didn’t need it. Thanks to soaring demand from Christmas party-goers, the sweaters sold themselves. Of course, Tipsy Elves didn’t explicitly encourage the kinds of Christmas carrying-on that resulted in police intervention at SantaCon. But the company’s products (which featured Santa joking about drinking, sex, and public urination) appealed to many of the naughty Santas that had become a problem in New York. “Swipe Right for Santa”sweater; with Taco Bell, they created“spicy” onesies. The publicity generated even more lift for the brand. This year, Tipsy Elves has done $125m in lifetime sales. But Tipsy Elves’ farcical formula has inspired imitators, which could slow the company’s growth. Sweater competition is starting to get ugly UglyChristmasSweater.comcollaboratedwith Popeye’s and sold out of sweaters in 14 hours. Other brands cut out the sweater-making middleman:Red Lobster,Whataburger, andMiller Liteall sold their sweaters directly. When Tipsy Elves started, it was outrageous compared to normal, grandma-style sweaters. But now, a whole new crop of even naughtier sweaters feature illegal drug use and curse words (both of which Tipsy Elves doesn’t use). Walmart recently came under fire for selling a Christmas sweater featuring Santa with cocaine; the so-called “Let it Snow” sweatersbecame Amazon bestsellersalmost immediately. Other smaller producers have launched edgy designs — like the“Epstein didn’t kill himself” sweaters— that Tipsy Elves won’t touch. regulatemisbehaving Santas — and inseveralcitiesresidents have circulated petitions to ban Christmas costume events like SantaCon. Bars and restaurants have joined the anti-Christmas chorus byclosingtheir doors during SantaCon and banning Santas. "Once a Santa threw up on a 5-year-old, we said we’d had enough of the Santas,” a restaurant server in San FranciscoexplainedtoSFGate. “That was five years ago. Even since, they implemented a No Santa... clause.” And even without a Christmas crackdown, it’s possible that the ugly sweater trend could unravel on its own. But so far, Tipsy Elves’ business is going strong. The company is expected to sell roughly6m sweatersthis year. The company’s pop-up retail location was so successful last year that Tipsy Elves is expanding its network of pop-up stores to 3 cities this season. And the company’s products for other festivities — from Pride festivals to bachelorette parties to other holidays — protect it from a potential Santa slump. Tipsy Elves also makes festive clothing for other events, like this T-shirt that shows Abraham Lincoln and George Washington playing beer pong (via Tipsy Elves) “We started selling 100% Christmas sweaters in our first year, and sweaters now are about a 1/3 of our total Christmas sales,” Mendelsohn told us. “For us, it's just about always innovating and making sure we're giving people other products to wear when they want to dress up.” So if the ugly sweater business goes out of style, just remember…EasterCon’s gonna be LIT.