Vuori charges ahead on store expansion
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.