Source: Outdoor Voices via Bloomberg

Can This Little Label Ever Play in Lululemon's League?

It's called Outdoor Voices, and it's picking up buzz and funding. Here's the plan.

Workout wear is having a moment. As more people embrace casual clothes in their everyday lives, and athletic brands like Nike and Adidas duke it out with such mass market giants as Gap and Forever 21, new brands are constantly popping up. Investors are scanning for the next Lululemon, a onetime niche yoga-wear maker that has become a $1.8 billion activewear business.

The latest indie brand to attract investor attention is Outdoor Voices, which announced today that it’s raising $7 million in venture funding in a round led by General Catalyst. That brings its kitty up to $9.5 million, not a lot of money for a tech darling but a pretty big infusion for a budding fashion label. Right now, all that Outdoor Voices has is a store in Austin, an e-commerce website, a devoted fan base, and some buzz. It plans to use the cash to open more stores and expand its offerings.

An activewear look from fitness apparel label Outdoor Voices.
An activewear look from fitness apparel label Outdoor Voices.
Source: Outdoor Voices via Bloomberg

"We want to be the next great activewear brand, but digital focused," said Tyler Haney, the company's 27-year-old founder. "This allows us to bring on an operations, e-commerce, and financial side of the team, when to date we’ve mostly invested in product people."

Coolness comes and goes fast in the industry, so fashion hasn't traditionally been a hot place to invest. A few activewear labels are exceptions, such as Cotopaxi, Rhone, and Ellie, which have each attracted millions in funding over the past year. So far, Outdoor Voices has retained its chic aura, becoming the first fitness label to be sold at J.Crew, and lauded by GQ as "New York's coolest fitness brand."

Founded in 2013 and based in a New York, Outdoor Voices carved out its niche in the more relaxed side of fitness. It never tried to appeal to the super-competitive sort who flock to the neon, performance-packed gear from such labels as Nike and Under Armour. Haney is going after those who are more interested in taking a hike than pumping iron at the gym. “We talk a lot about our customer as someone who’s active but not defined by it,” she said. She calls them "recreational athletes."

Outdoor Voices has lured away designers from established labels like Alexander Wang, Calvin Klein, and Lululemon. With its style cred boosted by fashion magazines, the label is looking to shore up its back end, improving its processes and its website. The 25-person company estimates it will have 40 employees by the end of the year. It will open its first temporary New York shop in November and is looking to have three permanent stores by the end of 2016.

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