There was a time when wearing anything less than a tweed jacket or a tailored shift left you underdressed in a college classroom or office, but those days are long gone. Since the 1960s, American youth have been pushing the boundaries of exactly how casual it is acceptable to be in public: By the 1970s, the typical campus uniform was jeans and T-shirts. By the 1990s, students were showing up to lectures in sneakers, sweatpants, and even pajamas. And yet, graduation from college generally meant transitioning into more proper adult clothing appropriate for a workplace setting and a more deskbound life.
Now, this desire to be comfortable and sporty has gone a step further—to the extent that it's changing the game for big-name retailers like J.Crew and H&M. Activewear once reserved for hungover mornings in Econ 235 or a Bikram class is considered, in some parts, "office casual." Tight-fitting printed pants and cashmere hoodies once reserved for a trip to the gym sparked a trend known in the fashion industry as "athleisure," referring to clothing appropriate for both working out and for whatever it is you have to do afterwards, be it brunch or a startup board meeting.
Sales of athleisure clothing are at an all-time high, generating $35 billion last year and making up 17% of the entire American clothing market, according to market research firm NPD Group. The fates of large clothing brands now hinge, in part, on how quickly they can respond to the demand for activewear. Analysts attribute some of J.Crew’s recent troubles to failing to create an athleisure line, while Gap's signature denim sales have dropped as shoppers opt for yoga pants instead. Meanwhile, Ann Taylor, Urban Outfitters, Net-a-Porter, and designers like Tory Burch and Stella McCartney have been quick to create their own fitness lines.
Last summer, Bandier made a splash as a retailer curating high-end, fashion-forward women’s activewear created by a range of designers. Named for its founder, Jennifer Bandier, the company sells close to 400 products from more than 40 different designers like Human Performance Engineering, Varley, and Ultracor. "I'm very inspired by what's happening in the market in terms of fashion," Bandier tells Fast Company. "These are clothes that you can wear all day, but that do not compromise sophistication and chicness."
Bandier first came across many of these brands in 2012 when she broke her foot and needed casual clothing to wear. She realized that mainstream activewear companies did not offer a wide range of fashion-forward, feminine outfits—but when she searched online, she found that a slew of tiny, emerging brands were creating sexy leopard print yoga pants and glittery leggings that fit the bill. "Unless you were seriously looking for these brands, you weren't going to find them," Bandier says. "I'm constantly scouring the Internet and going to trade shows." She's built a business bringing these smaller brands under one roof—a model akin to Barneys—and her store is particularly known for its colorful, printed leggings, which constitute 45% of her sales.
Even though Bandier is only a year old, the store has already managed to attract a slew of celebrity customers, including Lena Dunham, Tory Burch, and Liv Tyler, which has done a great deal to spur the popularity of the brand. In addition to the online store, Bandier has brick-and-mortar stores in Southampton, New York and in the Flatiron district in New York City. Two more are opening in Manhasset, New York, and Dallas, Texas. Bandier launched the company with her own funds, although as she expands aggressively over the next few months, she says she may begin to explore other funding options.
Bandier says that women from a wide age range, from their tweens to their seventies, shop at her store. "There are certainly some looks that appeal to particular age groups," she says, pointing out that younger women tend to prefer the revealing Michi leggings and bras made with mesh. "But really, we're finding is that everyone is interested in this type of clothing." She is predicting $10 million in sales this upcoming year, with a fifth of this coming from the website.
At the end of May, the online store ADAY launched with a line of slick outfits, made with high-tech fabrics designed for women to go from a yoga class directly to cocktail hour. The company was founded by Nina Faulhaber and Meg He, who met at Goldman Sachs while working in M&A investment banking. During their time in finance, they worked with many e-commerce companies and VCs, and carefully studied the market. They came to the conclusion that there was space for a brand like theirs that was focused on creating activewear designs that would not look out of place in a boardroom or an elegant bar. "We loved our Lululemon leggings that we would wear every weekend," Faulhaber says. "But as busy working women, we felt that most of the athleisure brands out there did not actually fit into our working lives very well. We wanted to create outfits for a weekday that would allow us to be really spontaneous, so that we could actually go from work to a yoga class if we wanted to."
Unlike Bandier, which offers customers a plethora of choices, ADAY has a minimalistic, curated approach, with only eight products in monochromatic colors. "We're all about offering staple pieces that also make a statement," Faulhaber says. Over the last two months, their most popular designs have included a $125 pair of leggings with rose-gold zippers and a $50 sports bra with an elaborately designed back. The average ADAY shopper spends about $190 on two to three garments.
Outdoor Voices is an e-commerce activewear company for both men and women that launched two years ago, catering specifically to millennials. Pants and hoodies run around $80 each, which places the brand squarely in the high-end activewear market, although it is still cheaper than many luxury brands, where yoga pants can cost upwards of $300. The brand has hired top designers away from Alexander Wang, Calvin Klein, and Lululemon to help create the right product and aesthetic.
Outdoor Voices prides itself on using high-quality, sweat-wicking, compression fabrics. The brand manufactures its own clothing in a factory in Los Angeles, and there is an emphasis on creating items that are soft to the touch. "We’re trying to inject new fabrics into the industry that have never been seen before," Andrew Parietti, the president of Outdoor Voices, tells Fast Company.
Outdoor Voices has no qualms about admitting that it is aggressively going after the biggest, most established brands in the space, specifically Lululemon. "Our number-one goal is to be the activewear brand of our generation," says Parietti. "We want to be listed among the activewear giants." In April, the company raised $1.1 million led by General Catalyst, with participation from a list of investors who had also backed Warby Parker, Blue Bottle Coffee, and Sweetgreen (whose cofounder will be joining the board). "No one has won the race in the athleisure space yet, but I’m absolutely convinced that someone will," Parietti says.
They face plenty of competition. Among the many new brands out there, Olympia Activewear, Vie Active, Michi, and Vimmia, all sell products priced to compete with Lululemon, where pants typically start around $82. Outdoor Voices declined to share its revenue figures, although it says its revenue is growing at a steady clip of 50% month over month. Last year, Lululemon's revenues were $1.8 billion, up 13% from 2013. Outdoor Voices has one store in Austin; Lululemon's has 300 stores worldwide.
The founders of the athleisure startups I spoke with—Outdoor Voices, ADAY, and Bandier—all referenced Lululemon with admiration. "Lululemon anticipated that there would be a generation of women who were used to playing sports in high school and college and wanted to maintain the active portion of their life when they graduated," Parietti says.
Many of the women who patronize Bandier were raised on Lululemon, Jennifer Bandier says. This set them up to expect high quality and beautiful designs from their activewear—and also got them accustomed to spending more. She credits Lululemon for paving the way for brands like hers. "People like choices," Bandier says. "They generally don't wear one designer head to toe. It's all about curating and editing outfits."
Jill Chatwood, director of global trend and collaborations at Lululemon, says the company is forward-looking and still dominating the space despite some recent PR scrapes; in the first quarter of 2015, Lululemon's revenue rose 10% from the previous year, to $423.5 million. "We are an originator brand, design-led and focused on inventing the future of the market we created," Chatwood told Fast Company via email.
While Lululemon's goal has always been "designing products rooted in function while also looking beautiful," Chatwood says the brand's strategy has matured considerably since its inception. Lululemon's core products were initially yoga-centric, but it now creates clothing for a wide range of activities, including running, swimming, and just hanging out on the weekend. And while its original customers were women, since 2013 it has invested heavily in creating a robust menswear line as well. One out of every seven dollars spent at Lululemon is now spent on men's products. "Today, we design and create products for women and men who lead busy, active lives," she says. "They are looking for technically beautiful clothing that takes them from studio to street to back again."
Parietti believes Outdoor Voices' customer demographics are somewhat different than Lululemon's. "We’re creating clothes for a generation that is 10 years younger than the Lululemon customer," he explains. "We’re leveraging the same trend, but we have other factors that play into our brand. We’re hyper-digital and we are trying to build an intimate community through social media."
Lululemon isn't phased by these new upstarts. If anything, Chatwood says that these new brands push the company to keep evolving. "Our passion for innovation comes as much from within as it does from seeing what others are doing," she says, adding that the brand is striving to meet the needs of both existing customers that have been loyal for years, and new ones. This means, for instance, having an active social media presence to reach younger consumers. Lululemon has had a head start growing its online community and has nearly a million followers on Instagram and more than 700,000 on Twitter.
Parietti and Tyler Haney, Outdoor Voice's founder and CEO, believe that their age—both are in their late twenties—is an advantage when it comes to connecting with customers. "We are our target demographic," Parietti says. Take, for instance, the brand’s motto, which is simply "Doing Things." While Nike's iconic 1998 tagline, "Just Do It," worked like a charm, helping Nike double its share of the sneaker market, Parietti and Haney believe that millennials are not keen on the competitive and hard-driving mentality Nike embodied. "We’re dealing with a customer that loves to be active but they don’t want to be told that they need to aspire to something greater," Parietti says.
Outdoor Voices recently launched a #DoingThings campaign on Instagram, inviting people to post pictures capturing whatever the term meant to them. The hashtag seemed to resonate with customers, who shared photos of themselves in yoga poses, playing with their dogs in the park, running around town, and even taking naps outdoors.
"Our generation isn’t all about performance, but rather about the emotion associated with being active," Parietti says. "We want clothes that we can sweat in, but that don’t look like we are going to play the U.S. Open or the World Cup."