Outdoor Voices announced a Series C funding round of $34 million, including $9 million from a previous convertible investment to bring former J. Crew CEO Mickey Drexler onto the athleisure start-up's board of directors as chairman, the company said in an email to Retail Dive.
The round was led by GV (formerly known as Google Ventures), a new addition to the OV roster, and has raised $56.5M in funding to date, the company said. Other investors include General Catalyst, Forerunner Ventures, Collaborative Fund and 14W.
The Austin, TX-based retailer opened its latest stores in December and now runs seven, in New York, Los Angeles, San Francisco, Dallas, Austin and Aspen. Outdoor Voices founder and CEO Tyler Haney told Retail Dive in an email that the new capital will be used "to scale the community we've built around Doing Things. This includes continuing to build shops and host events in new cities across the country, and reaching an expanded audience online."
Outdoor Voices was founded in 2013 by Colorado native Haney as a competitor to Lululemon, for people who want to be active without necessarily identifying as serious athletes. The company began selling online only, but, like so many once pure-play e-commerce ventures, has expanded with brick-and-mortar stores. Despite the pressure on physical retail from an overbuilt environment and the growth of e-commerce, opening stores has emerged as a necessary path for growth.
"The community that Tyler and her team have built around finding joy in being active is impressive," GV Partner Laura Melahn said in a statement. "We're excited to partner with Outdoor Voices as they continue to design best-in-class clothing and define a digital-first omnichannel retail strategy built for the world we live in today."
Outdoor Voices is surging at a time when Lululemon is without its high-performing CEO, Laurent Potdevin, who was ousted earlier this year under murky circumstances. The retailer is playing in a space that has seen increased competition since Lululemon first innovated the category. Gap Inc., for example, has seen athleisure sales skyrocket at both its Gap and Athleta brands. Athleta, whose activewear apparel generally beats Lululemon's on price, moved from mid-teens sales growth in the first half of 2017 to mid-20s in the back half of the year, and Gap Inc. CEO Art Peck called the response and engagement from new and existing customers "outstanding."
All that competition is slowing down sales growth in the category, however. While non-activewear sales declined as activewear sales grew in 2017, last year's rise wasn't as steep as it has been: Activewear sales rose 2% to $48 billion (22% of total apparel sales), according to the NPD Group. Sales of both men's and women's activewear grew in 2017, but women's supplied much of the energy behind the category's growth, reaching $21.9 billion in sales with a 4% increase over 2016, NPD found.
"Categories like active apparel bottoms, undershirts, and swimwear – which indicate the consumer's concentration on comfort, the staples and niche products – are the few sources of consistent, long-term growth in today's apparel market," Marshal Cohen, NPD Group chief industry advisor, said last month.