The activewear category just got another vote of confidence. Vuori, the California-based company selling performance apparel including joggers, leggings, sports bras and tank tops, reached a $4 billion valuation after SoftBank Vision Fund 2 invested $400 million.
The investment comes as Vuori seeks to expand stateside and abroad. Currently, the apparel company has 10 brick-and-mortar stores in the U.S., with nine located in California and a tenth popup location in Bridgehampton, N.Y. that will remain open through the end of October.
But the brand is betting big on brick-and-mortar, with plans to open more than 100 new U.S. stores over the next five years.
Desiree Swanson, Vuori’s chief financial officer, told Sourcing Journal that the Encinitas, Calif.-based activewear firm is looking at markets that embody and value “great relationships, healthy lifestyles, getting outdoors, and great community.”
“As Vuori opens up more retail locations, we want to extend our sustainability focus in beach cleanups and other community activities,” Swanson said. “We look at those communities first where we know that we will naturally partner and make a positive impact. And there’s a lot of opportunities still with a small footprint to continue to do it this way.”
The international expansion will kick off in 2022, with Vuori launching localized digital sites in key markets throughout Western Europe and the Asia-Pacific region, as well as an innovation center in Taiwan.
“We’re just starting with the same playbook we had here, looking at direct opportunities and also key wholesale partners,” Swanson said. “As we go into markets and we meet those potential partners, and we learn a little bit from our digital customer, that will really guide the path of what countries we go [into] first and when. We’re really at that early stage of what’s the right fit.”
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The SoftBank Vision Fund will be a key expansion driver not just through its deep pockets, but because of its expertise in bringing innovative brands overseas, according to Swanson.
Earlier this year, the $40 billion fund led Klarna’s $639 million funding round, spearheaded a $775 million raise for DTC acquirer Perch and most recently, was the chief backer of the $209 million investment in luxury marketplace Vestiaire Collective.
While apparel retail businesses have been going public left and right in 2021, Vuori’s investment haul is significant for a private business operating in the category. But unlike many other upstarts, particularly digital natives that rely on marketing and customer acquisitions costs to see growth, Vuori continues to be profitable, and has been since 2017.
With the overall surge in activewear and comfort or casualwear sales since the start of the Covid-19 pandemic, the brand was well positioned to attract investors looking to cash in on the popular category. Levi Strauss & Co. and Wolverine Worldwide have expanded beyond their respective core competencies in denim and footwear to scoop up smaller sellers as a way to grab a foothold in athleisure, showing just how much of an impact Vuori and its competitors have made on the industry.
As Vuori continues its growth, the company said it will broaden its product offerings, make key investments in infrastructure and people, and augment its sustainability efforts.
Through partnerships with organizations such as Climate Neutral and CleanHub, the brand is offsetting its carbon and plastic footprints while taking steps to eliminate 80 percent of plastics—including 3 million polybags—from its shipping and supply chain by 2022.
“Our sustainability focus has always been pronged on five things: materials, waste, carbon, workplace and community focus, and we look to invest equally across those,” Swanson said, highlighting the efforts driven by Vuori’s vice president of design, Sarah Carlson.
With a strong e-commerce business, a growing brick-and-mortar presence, and a network of wholesale partners that includes Nordstrom and REI, Vuori appears to be firing on all cylinders. The company’s approach to style and branding seems to help its cause, with its West Coast lifestyle aesthetic and high-quality, comfortable fabrics appealing to consumers living increasingly home-based lives.
Although it hasn’t revealed where it will expand its products, with Swanson saying that the company doesn’t currently have plans to enter new categories, Vuori now has an opportunity to capitalize on the more casual return-to-office environment that is developing. Products like chinos, khakis, vests and jackets fit into a less formal workplace dress code.
“Our focus is always to challenge newness within the categories that we currently have,” Swanson said. “We think we have a lot of opportunities where we already play, and the focus is just finding additional opportunities to meet our customer where they are. We’ll continue what we’ve already done over the past five years on our product focus to continue to create the best product.”
SoftBank Vision Fund 2 is the second institutional investor to back Vuori, following Norwest Venture Partners, which invested $45 million in the company in 2019.
“SoftBank has a long track record of identifying market-leading companies and supporting entrepreneurs with bold visions,” said Joe Kudla, founder and CEO of Vuori in a statement. “We are grateful to have their partnership as we move into an exciting new period of growth and evolution as a company.”