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Vuori charges ahead on store expansion

Illustration of an athletic woman in workout clothes running with shopping bags.

Illustration: Gabriella Turrisi/Axios

Vuori is proceeding with its ambitious store expansion and hiring efforts this year despite choppy economic waters, founder and CEO Joe Kudla tells Axios.

Why it matters: Consumers can't seem to satiate their appetite for athleisure wear — rival Lululemon's revenue, for example, increased 32% to $1.6 billion in Q1.

  • And as we've noted, retailers are opening stores at a rapid pace as consumers return to in-person shopping, and it becomes more difficult to acquire customers online.

By the numbers: The active lifestyle brand aims to open 100 stores over the next five years, Kudla says.

  • Near term, Vuori will open 10 more this year and between 20 and 25 next year on top of the 21 stores it already operates, he says.
  • "We're not slowing down on that cadence," he says. The company has been cash flow positive since 2017, Kudla said, noting timing is optimal to look to secure additional real estate.
  • Vuori will also add 100 employees this year, with plans for another 200 next year.

Yes, but: Despite the pace of its growth, which Kudla says will be a high double-digit percentage this year, the company is taking a conservative approach to ordering inventory for next year.

  • "We have plans that take into account a potential recession," he says, adding the company has not yet seen an impact on sales.
  • Kudla declined to disclose financial figures for the company.

Flashback: The company raised $400 million from Softbank at a $4 billion valuation last year, representing one of the largest fundraises from a private apparel company.

  • "Most of the SoftBank investment went to reward early shareholders that believed in Vuori’s vision from day one," Kudla says, and not to fund growth.
  • Prior to last year, Vuori raised $47.5 million, including $45 million from Norwest Venture Partners in 2019 and about $2 million in 2017.
  • That would mean investors who sold their shares received a hefty return.

Yes, and: Of all the money raised, the total outside capital that went directly to Vuori's balance sheet was a mere $9.5 million, with the company largely bootstrapping itself from its own cash flow, it says in an email.

Be smart: Typically a capital raise of that size at that valuation might point toward an eventual IPO.

  • But Kudla says that while "going public is a viable path" the company "could someday take," it's not a path Vuori has committed to.
  • He declined to elaborate. (Last year we saw a flood of retail DTC public offering filings, though this year's market is markedly different from 2021.)

What's next: Vuori is opening its first international store in London's Covent Garden after expanding its presence in wholesale and DTC in a number of overseas markets across Europe, as well as in China and Japan.

  • It plans to expand into outerwear in 2023, after seeing success in newly introduced categories such as women's swim, tennis and pickleball.

Of note: Kudla was recently named Entrepreneur of the Year by Ernst & Young for the Pacific Southwest.

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