Athleta continues to benefit from the trend toward athleisure and expects to reach 100 stores by the close of the year.
Acquired in 2008, the women’s performance apparel brand opened its first door in 2011 and ended 2013 with 65. It had 79 open at the close of the quarter, adding eight in the period.
Asked about the expansion potential, Glenn Murphy, Gap Inc.’s chairman and CEO, said the concept has proven it can work in the mall, street locations and strip centers. Athleta’s online business is also doing “really well” and being supported by the openings.
“We have all the metrics that say we go into a trade area and we do not have a store, when we drop a physical store in, the multiplier on the pool of online business we do is very attractive,” said Murphy.
Murphy said the Athleta business continues to benefit from the atheleisure trend, particularly popular with the Millennials, with urban women wearing yoga pants and other leggings as streetwear and everyday-wear. He remarked, “The trend is their friend.”
He also stressed that even though Athleta often gets compared to Lululemon, the opportunity reaches across multiple categories.
“This is not a one-dimensional business,” said Murphy. “I've also said many times that our key competitor is Nike. I know there is other competitors who get a lot more air time, but at the end of the day, Nike is the big player here and the person we look at the most and where the share is going to come from for Athleta.”
Finally, he noted that “a lot of people try to jump” on the athleisure trend, including the Gap’s other divisions. Old Navy launched its Active line over three years ago and the Gap chain introduced Gap Fit also over three years ago. But Murphy said, “We are dominating per share with Athleta because it's a standalone business.”
Murphy added, “I said at the April analyst meeting, and still believe it, it is going to be our fourth global brand. It's earned the right to be considered for that. We haven't decided yet, but it's earned the right to be given consideration.”
