At Levi Strauss & Co.’s Investor Day, Michelle Wahler, CEO and co-founder of Beyond Yoga, said the athleisure brand will surpass $100 million in sales in 2022. Growth should accelerate through category and channel expansion, including opening its first brick-and-mortar doors.
Levi’s acquired Beyond Yoga in September 2021 for $400 million.
In Wahler’s first address to the investment to the community since the acquisition, she recounted the brand’s back story and how she co-founded the company in 2005 with Jodi Guber Brufsky.
“From the beginning, and before it was cool, we set out to make a size-inclusive clothing line that fit all shapes and sizes that made people feel amazing, and that’s exactly what we did,” said Wahler. “We celebrate you as you are today, and we don’t want people to feel like they have to work out to fit into their workout gear. So we create super-soft, incredible products for year round-the-clock lifestyle, and we dress you for your toughest workouts, for lounging, hanging out with friends, and absolutely everything you need to do. And we make the clothing that takes you beyond.”
The inclusive stance is reflected in sizing and advertising with a commitment to never Photoshop a woman’s body.
The product quality, however, ultimately wins fans. She said, “Our intensely loyal and high repeat customers love us because we consistently deliver high-quality, high-performance buttery soft products that people love.”
The brand’s data shows that its core customers purchase three times within 12 months.
Beyond Yoga aims for a healthy core offering complemented by monthly product drops featuring the latest silhouettes, colors and fabrics. The brand introduces 500 SKUs per season.
Beyond Yoga’s core customer ranges in age from 25-to-44 years old, with its product used for activities, including Yoga and all occasions.
A survey of over 2,000 of its customers found that 68 percent wear Beyond Yoga clothing for working out and non-workout activities.
Sustainability is another cornerstone of the brand, with production predominantly in the U.S. to support a lower carbon footprint. The company touts that ninety percent of fabrics used to manufacture Beyond Yoga products are either bluesign certified, Lenzing Tencel Lyocell or recycled. Prints use waterless printing methods.
Beyond Yoga’s growth over the last three years, over 30 percent CAGR (compound annual growth rate), the brand has been profitable with over 60 percent gross profit margins. Said Wahler, “We have just invested everything back into our business so we could continue to grow.”
About half of its sales in 2021 came from beyondyoga.com. The remainder was wholesale, with about 20 percent online and 30 percent from third-party physical stores.
Wahler shared four strategic pillars for growth:
- Investing in its team;
- grow brand awareness,
- category growth (including men’s), and
- channel & geographic expansion.
Wahler noted that since the acquisition closed last September, it has hired 30 employees across all departments, including e-commerce and brick & mortar. She said “almost 100 percent” of Beyond Yoga employees have remained with the company after the acquisition, and she believes that reflects the promise of the new Levi’s partnership.
She also believes Beyond Yoga’s values continue to support recruitment efforts, including its “female-founded, female-led” positioning. Wahler said, “I am constantly impressed with the incredible people who want to be a part of the Beyond Yoga team, and the fact that we’re over 85 percent female, that we’re incredibly diverse and extremely committed to our values, makes it a very compelling place to work. Then you factor in the Levi’s component and their incredible recruiting strength, and we are building a powerhouse team for the future.”
In building brand awareness, Wahler noted that Beyond Yoga traditionally grew its customer base “extremely organically,” relying on customer word-of-mouth, discovery on wholesale partner selling floors, and performance marketing. Under Levi’s, Beyond Yoga is developing advertising campaigns to “amplify our message of inclusivity and comfort.”
Other newer outreach tools include community and influencer engagement on social media, event marketing via activations and pop-ups, live streams, and connected TV.
On category expansion, Wahler discussed recent successes in adding maternity, dresses and men’s to its assortment.
The maternity line, called Beyond The Bump, is one of the brand’s fastest-growing online categories. Three of its top ten styles are sold on beyondyoga.com.
“Our Beyond The Bump segment is popular with women staying active during their pregnancy,” said Wahler. “Women are gravitating toward our buttery soft fabrics when they need to feel a little extra comfort.”
The company also sees some of its highest lifetime values from Beyond The Bump buyers as they transition from pregnancy to loyal/repeat customers of its core product. The brand recently found success with an expanded collection of nursing tops.
Beyond Yoga, last summer, introduced a small capsule of dresses that “our customers couldn’t get enough of,” said Wahler. An expanded assortment this year helped drive a strong uptick in online sales. Said Wahler, “Our customers love the flattering silhouettes, and they also like that we have pockets.”
Beyond Yoga has found that almost 50 percent of customers buying dresses on its website were existing customers willing to try a new category, while the other half were new customers. Wahler said, “These insights help inform our customer acquisition strategy and our retention and help us figure out where we need to deploy resources to maximize sales.”
On channel and international expansion, Wahler said Beyond Yoga is planning a “deeper presence at wholesale,” accelerating growth beyondyoga.com, and testing brick & mortar stores.
Only five percent of Beyond Yoga’s sales are international, and the brand is tapping Levi’s, which conducted 55 percent of its sales internationally in 2021, to navigate its global growth. Wahler said, “We’re being very strategic, making sure to only open in markets with premium placement and high visibility.”
In the U.S., Beyond Yoga works with a “tremendous network of premium wholesale partners,” including studio owners Pure Barre and Core Power Yoga, REI and Scheels, Nordstrom and Bloomingdale’s, Four Seasons spa, Equinox, and online pure-plays, including Revolve and Shopbop. Beyond Yoga will start selling at college bookstores under a new partnership, Wahler said.
Beyond Yoga is in 2,000 doors, with growth expected from new and expanded categories, elevated brand presence through shop-in-shops, premium placement, and door expansion. She noted that the brand remains in less than half of its doors at some longstanding partners, such as Nordstrom. Wahler said, “There’s no reason we shouldn’t be in all of them.”
E-commerce remains “a huge growth area” for Beyond Yoga, with the brand formed around a “digital-focused mindset.” Brick-and- mortar stores will be tested, but the company provided few details.
“We’re going to use the foundation that we’ve built from our wholesale partners to our e-commerce to leverage an amazing experience at brick and mortar for our consumers,” Wahler said. “And we’re going to use the data that we know about our customers, where they are, and make sure that we’re opening stores in the right places to serve our existing consumers but expand and build brand awareness.”
Wahler concluded in her presentation, “Thanks to the partnership of LS & CO. and the investment in our capital and resources, Beyond Yoga is poised to be a household name in the athleisure market. A billion-dollar future is ours for the taking.”
At its Investor Day, Levi Strauss set a goal to reach 2027 revenue of $9 billion to $10 billion, reflecting 6 percent to 8 percent organic annual growth. The forecast marks an acceleration from its former annual growth rate target in the range of 4 percent to 6 percent.
Targeted revenue growth for Levi’s brands over the five-year period is expected to be $2 billion to $2.5 billion, and Dockers and Beyond Yoga’s combined revenue is projected to approach $1 billion by 2027. In fiscal 2022, Levi’s brands’ revenues are excepted to reach $6 billion in fiscal 2022 with combined sales of Dockers and Beyond Yoga expected to be about $500,000.
At the event, Chip Bergh, president and CEO, Levi Strauss, said the Beyond Yoga acquisition resulted in the company entering the “high-growth, high-margin premium performance athletic market. He said the athletic performance market is more than double the size of the global denim market. Beyond Yoga also adds portfolio diversification. Bergh said, “Beyond Yoga gives us a powerful platform to strengthen our women’s business and accelerate growth.”
Photo courtesy Beyond Yoga
