- Investors also include former NBA player Shane Battier
- Rhone's co-founder is son of ex-MSG boss Dave Checketts
Rhone Apparel, a tiny company looking to cash in on the so-called athleisure boom, has lined up a sports world Who’s Who of backers.
Former NFL Network President Steve Bornstein, ex-National Basketball Association Commissioner David Stern, retired NBA player Shane Battier and ESPN broadcaster Ryen Russillo are teaming up with M3 Ventures to raise $5 million. M3 Ventures is an investment fund managed by a former CAA executive that’s focused on early- and growth-stage consumer brands.
Co-founded two years ago by the son of former Madison Square Garden President Dave Checketts, Rhone is aimed at the premium buyer and sells what it calls a Sentry Short Sleeve shirt for $68 and a Monk Featherweight Hoodie for $98. This fall, Rhone products will be available in 20 Bloomingdale’s locations, 24 Equinox outlets and two Nordstrom stores. Rhone faces stiff competition from entrenched players such as Nike, Lululemon and Under Armour.
“‘Athleisure’ has become a very popular category,” said Stern, a senior adviser at Greycroft Partners, a venture capital firm that invests in digital media companies. “And I was impressed by the products.”
Bornstein invested the most money, said company co-founder Nate Checketts, declining to be specific. Rhone raised $1.2 million in a seed round in 2013.
“Hopefully this validates the brand,” Nate Checketts said. “It’s not just athletes, but successful sports-business people putting capital behind it.”
Some of the money will be plowed into research and development -- Rhone already incorporates odor-fighting, anti-microbial silver into its garments. A 4,000 square-foot retail store and office in Stamford, Connecticut, is in the works; as is a Christmas season pop-up store in New York’s SoHo district. Rhone also will relaunch its website and double staff to 20.
Shoppers’ growing appetite for athletic apparel and footwear as street wear is driving sales, accounting for $33.7 billion or 16 percent of the total apparel market in the year ended June 2014, according NPD Group Inc. Spending on active wear grew 7 percent that year, while total apparel sales excluding active wear slipped 1 percent, the industry consulting firm said.
Rhone is joining a crowded market, with brands like Urban Outfitters, Express, Forever 21 and American Eagle introducing their own athleisure lines and companies like Gap’s Athleta trying to present fashion and function.
“We view this as a coming-out,” Checketts said. “What we’ve been doing is learning. We’re really going to start building the business. Having capital allows us to do great things. We can take some risk we wouldn’t otherwise do.”