Stretching Out

Sales of activewear in the U.S. in the first six months of 2021 increased 40% compared to the same period in 2020 and 25%-plus compared to 2019, according to the NPD Group.

As social activities start to open back up, consumers are going out with an increasingly casual sense of style, leading the fashion world to see long-term potential for yoga apparel, athleisure, and activewear. These products had been on the rise prior to the pandemic, of course, and have performed better than the rest of the hard-hit apparel business throughout the crisis, as many consumers have worn these comfortable items day in and day out.

One indication of the industry’s high hopes for the future of the category is a recent profusion of business deals in the sector. Some of the activities since last fall include:

  • Acquisitions. Levi’s purchased Beyond Yoga and Wolverine Worldwide bought Sweaty Betty, with both deals announced earlier this month. Beyond Yoga, an L.A.-based brand founded in 2005, has seen sales more than double in the past three years and is expected to contribute more than $100 million to total sales in fiscal 2022, according to Levi’s. U.K.-based Sweaty Betty, another fast-growing label, was founded in 1998 and attributes 83% of sales globally to direct-to-consumer channels. It also sells in its own branded shops in the U.K. and Asia, shop-in-shops in retailers in the U.K. as well as in Nordstrom in the U.S., and in other retail stores.
  • Companies entering or increasing their presence in the segment. In July, Victoria’s Secret launched On Point, an athleisure/performance athletic wear brand that includes leggings, sports bras, yoga pants, moisture-wicking and compression gear, and loungewear. Brand ambassadors include yoga instructor Emily Chen, skier Eileen Gu, and New York City Ballet member India Bradley, Separately, Knix, another lingerie label, announced an activewear line this month, Knix Active, in partnership with model Ashley Graham, who will also serve as the global brand ambassador. The focus is on body positivity.
  • Brand extension. A number of leading yoga and activewear brands are expanding into new products and services. Athleta introduced its new digital wellness platform, Athleta Well, in July. The venture is described as a safe community space to discuss issues such as body positivity and mental health, as well as offering workout content. Brand ambassadors such as Olympic medalists Simone Biles and Allyson Felix will contribute. Meanwhile, a fast-growing player, Alo Yoga, opened its first restaurant, a vegan destination located on top of its Flatiron neighborhood store in New York, last fall. Called Sutra, the venture is a collaboration with celebrity chef Matthew Kenney. Alo also launched a four-piece fine jewelry capsule with L.A. designer Logan Hollowell in fall 2020. The collection’s theme is mindfulness. Last fall, Target paired with Cassie Ho’s Blogilates brand, the leading female-skewing fitness channel on YouTube (represented by Semaphore Licensing), for a collection of vegan suede yoga mats, gold-colored dumbbells, and resistance bands available in Target stores and on its e-commerce site. Ho’s apparel line is sold under the Popflex Active brand.
  • Plans to go public. Fabletics, the TechStyle Fashion Group-owned, membership-based workout label founded in 2013 with actress Kate Hudson as its face, hired three banks in July to help it prepare for an initial public offering. Analysts believe the IPO could value the company at $5 billion or more. Meanwhile, in India, Patanjali, the wellness company founded by Ayurvedic yogi Swami Ramdev, is considering whether an IPO is the right move, with a decision expected by the end of the year. The company, whose sales reached 30,000 crore rupees (more than U.S. $4.5 billion) in fiscal 2021, has an apparel operation under its umbrella called Paridhan, operating online and through its own retail stores across India. Clothing brands under the Paridhan banner include Aastha (womenswear), Livfit (unisex sportswear), and Sanskar (menswear).
  • Collaborations and in-bound licensing deals. Skateboard label Palace teamed this month with Adidas Originals for a yoga and relaxation capsule called Palaste, following collaborations focused on tennis, golf, and football. Kendall Jenner partnered with Alo Yoga in March for a collection of leggings, bras, and other yoga wear. And one of the most high-profile partnerships in this space, Beyoncé’s Ivy Park label with Adidas, which launched in 2019, continues to drop new collections. The most recent is a large capsule (58 pieces) debuting this month called Ivy Park Rodeo, inspired by the contribution Black men and women have made to the culture of the American West.

The question now is how long the proclivity for wearing yoga pants and other athletic and athleisure wear, no matter the occasion or setting, will continue. In addition, how many brands can the segment accommodate long-term? After all, the competitive set already ranges from the major players including Nike, Lululemon, and Under Armour to an abundance of smaller players such as Outdoor Voices and Nobull. Their collective distribution hits all tiers, from sporting goods locations, to mass and mid-tier retailers, to department and specialty stores. The segment has also become crowded with collaborations and permanent labels tied to celebrities and other IP.

Despite these potential concerns, the high level of activity in this space in recent months suggests many corporate players believe the category still has plenty of room for growth.

A reminder that Raugust Communications’ e-newsletter comes out tomorrow, August 17, 2021. The datapoint research spotlight will take a look at what products are most commonly involved in licensing and collaboration deals in this category, while the Licensing Topic of the Month will discuss experiential initiatives, which are making a comeback in a continuing period of uncertainty. If you are not yet a subscriber, you can sign up here.

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