Dive Brief:
- Outshining the blockbuster funding rounds of Allbirds, Glossier and Quip in recent years, DTC activewear brand Vuori has raised $400 million at a $4 billion valuation from SoftBank Vision Fund 2, the company said Wednesday. That's four times higher than Allbirds' biggest funding round.
- The deal marks one of the largest investments in a private apparel company, according to Vuori, and potentially one of the highest valuations for a non-public apparel brand. Notably, Vuori has been profitable since 2017, just two years after its launch.
- Vuori will use the funds to expand internationally in key markets throughout Europe and Asia Pacific next year, as well as to execute on an ambitious brick-and-mortar expansion in the U.S. that sees it opening 100 stores in the next five years.
Dive Insight:
Vuori has one main thing other DTC brands don't have: profitability. And Vuori's well aware of that distinction.
"With a strong e-commerce business, thriving brick-and-mortar stores, and a network of best-in-class wholesale partners, Vuori, unlike many other digitally native brands, has been profitable since 2017," the company said in its press release announcing the funding.
That alone may be behind the massive amount of funding the activewear company has managed to rake in, which is significantly higher than what many other DTC brands have raised recently. Allbirds, Glossier and Quip each raised $100 million rounds in recent years, and even those were relatively high compared to other retail companies.
After temporarily pausing physical expansion plans in 2020, Vuori started back up again this year, and has even bigger plans for the future. With the cash in hand from SoftBank's investment, Vuori is planning to open 100 stores in the U.S. by 2026 and launch as an "omnichannel" business in several international markets. The company will also broaden its product assortment — a popular method for many DTC brands looking to grab more market share — and invest in its infrastructure and team.
Sustainability efforts will also be expanded. Currently, the brand is hoping to eliminate 80% of plastic from its supply chain by 2022, and already offsets its carbon and plastic footprint.
While Vuori is at its core a DTC brand, the company has also made wholesale partnerships with top retailers like Nordstrom and REI to sell its wares. Operating in the popular athleisure space, the company saw a spike in sales when the pandemic began last year (namely for products like its joggers), and many of those customers came back later in 2020 to shop other product categories, Senior Director of Retail Catherine Pike told Retail Dive last year.
The athletics space as a whole has largely benefited from pandemic-induced trends, and Vuori appears to have its sights set on those competitors as it scales. A spokesperson in an email noted the brand has "shunted market share from mainstream brands like Lululemon" as it has grown in popularity.
