California Helps Yoga Wear Shape Up to Be a Fast-Growing Category
On a recent sunny afternoon in rustic Runyon Canyon, located on the fringes of trendy Hollywood, the well-heeled hiking crowd sweating up and down the dun-colored hills seemed to have visited the same store on the same day.
Along the dusty dirt path, 90 percent of the women were wearing yoga pants identical in color and shape. Every pant was black with a capri-leg silhouette. Hiking shorts were a rare sight.
In the past five years, yoga wear seems to have invaded the closets of just about everyone—whether they are active or not. It has become the outfit to wear to the local coffee bar on a Saturday morning or to go grocery shopping on the weekend. It's a popular outfit for lounging around at home after work. And California companies have played a major role in this burgeoning category.
Yoga wear is now a $14.2 billion business in the United States, growing twice as fast as women's apparel overall, according to The NPD Group in Port Washington, N.Y., which tracks apparel and other consumer trends.
"Yoga wear is much more comfortable today than it was before," said Marshal Cohen, retail analyst at The NPD Group. "I ask women all the time, 'Do you prefer yoga pants or your fashion jeans?' And they go, 'No question, yoga pants are more comfortable.'"
Yoga wear, Cohen said, is one of the fastest-growing categories in apparel because more people are taking yoga classes than ever before, they are living in their yoga wear even if they don't take yoga classes, and more retailers are stocking their stores with the exercise togs. Yoga wear can be found in every kind of store around—from Target and Wal-Mart to Neiman Marcus and Bloomingdale's. "All of a sudden it has great growth and acceptance," Cohen noted.
A 2012 study by Yoga Journal, a San Francisco–based yoga magazine, showed that 20.4 million people practice yoga, up 29 percent from 15.8 million in 2008. But about 44 percent of Americans call themselves "aspirational yogis," which means they are interested in trying yoga but probably spend more time wearing the clothes than bending their body like a pretzel.
This trend is not lost on large apparel companies, such as VF Corp., which in 2007 acquired Lucy Activewear, founded in Portland, Ore., for $110 million. It has guided the brand to a label heavy on yoga attire.
In 2005, Liz Claiborne Inc. bought long-time yoga-clothing company Prana, based in Carlsbad, Calif., for $34.4 million, and Gap Inc., in 2008 acquired Athleta, a yoga and activewear clothing company based in Petaluma, Calif., for $150 million. At the time of its acquisition, Athleta had one store. It had 35 stores by the end of last year, and its retail expansion is on an aggressive path.
Athleta is trying to compete with Lululemon Athletica, the giant yoga wear chain of stores based in Vancouver, Canada. The formidable brand has seen its annual revenues explode from $453 million in fiscal 2010 to $1.37 billion in fiscal 2013.
But not all big labels have been able to successfully grow these smaller labels. Only a few years after buying Prana, Liz Claiborne sold it back to the original owners, Beaver and Pam Theodosakis, for $36.5 million. The Theodosakises partnered with private-equity firm Steelpoint Capital Partners to close the deal in 2008.
And Kellwood, which in 2011 acquired the young San Francisco yoga wear line Zobha, turned around and in late July sold it to FAM Brands, a Los Angeles activewear and intimate wear company whose annual revenues are around $250 million.
Zobha, a higher-end line whose annual sales came in at $10 million, rounded out FAM Brands' stable of seven yoga wear lines, which include Marika and Balance Collection.
"Yoga wear is becoming more and more everyday clothing for people because of its comfort, price and fashion," said Frank Zarabi, chief executive of FAM Brands. "We were looking very hard to develop a strategy of good [yoga wear], better [yoga wear] and best [yoga wear] where prices start at $16, go to $50 and now $100 for yoga pants made by Zobha."
Zarabi's plan is to take his labels and expand internationally as the yoga wear craze re-invades Asia and marches into developing countries. "We are now in seven countries," Zarabi said. "In the next five years we will be in 25 countries. I think the sky's the limit."
Lululemon may be the leader in the yoga studio, but smaller companies like Prana are growing at a fast clip, too. In 2005, Prana's revenues were $30 million. This year they are approaching $100 million, said Prana Chief Executive Scott Kerslake.
Prana has spent years developing its clientele of specialty stores and yoga wear stores. One of Prana's principal customers is the national sporting-goods chain REI, which has stocked the company's T-shirts, dresses and hoodies for years. Currently, Prana is in 1,500 doors.
"Yoga is one of the fastest-growing sports activities. The participation numbers are through the roof," said Kerslake, who also founded Athleta Inc. in 1997 before it was sold to Gap Inc. "And culturally, this product has been accepted for everyday wear. It is the uniform in every major city and suburb. It's a much larger market than just the yoga market. Most yoga products are not used for yoga."
Kerslake admits there might be a little "froth" on the wave of the yoga wear movement, but keeping ahead of trends and developing new products—such as sweaters, dresses, and, most recently, swimwear—is keeping the company moving forward.
Prana also prides itself on having embarked on the path of sustainability long before it was popular. The company was an early adapter of organic cotton, and recycled hangtags have been with the company since it was founded in 1993.
And with the yoga spirit in mind, the company sounds a gong at 2:45 every afternoon for one minute of silence—even at meetings.