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Outdoor Voices bought by Consortium Brand Partners

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Jun 3, 2024
Illustration of an athletic woman in workout clothes running with shopping bags.

Illustration: Gabriella Turrisi/Axios

Outdoor Voices, the distressed athleisure brand, will be acquired by private equity firm Consortium Brand Partners, staving off bankruptcy.

Why it matters: Activewear has become a crowded space, challenged by a consumer discretionary pullback due to inflation.

Driving the news: The transaction was done through an assignment for the benefit of creditors, an alternative to a formal bankruptcy process, Bloomberg reports, citing a source familiar.

  • The company was reportedly heading toward bankruptcy in March, after failing to pay vendors and the rent on some of its stores, according to Sourcing Journal.
  • Outdoor Voices closed down all of its brick-and-mortar locations that month and laid off a majority of its corporate workforce.

Flashback: Like many DTC brands, Outdoor Voices overspent on customer acquisition costs and struggled to maintain consistent profitability.

  • The company's valuation sunk to $40 million in 2020, down from its $110 million valuation in 2018.
  • The company's backers included GV (formerly Google Ventures), General Catalyst, Forerunner Ventures, and French brand A.P.C.

Context: After a series of management changes — including the departure of its founder, Tyler Haney, in 2020 — Outdoor Voices was said to be looking for a buyer in 2022, according to Business of Fashion.

What they're saying: "We're always looking for brands that are bigger than their current business," Consortium managing partner Cory Baker tells Axios.

  • "Sometimes you'll come across a brand that's distressed under the hood. It is less of an issue so long as the customer is still there, [and] believes in the product, believes in the story."
  • This marks the consumer-focused sponsor's second acquisition, following its majority stake purchase of Reese Witherspoon's fashion brand Draper James last year.

What they found: Baker says Outdoor Voices had various investors, took a significant amount of debt, and opened stores in very expensive prime locations. "It was sort of a recipe for the challenges that the company faced."

What they did: With the store closures, Consortium was able to buy "the parts of the business that matter to the customer," he says.

  • "We're fortunate that we're not burdened by expensive and unprofitable leases or the debt load that the seller had dealt with," he says.
  • Consortium's investment brings Outdoor Voices to profitability, according to Baker.

What's next: Baker sees more opportunity for Outdoor Voices in wholesale, especially to expand into specialty and department stores.

  • Consortium will continue to invest in the e-commerce business and a better offering of products, and it plans to lean more on design and marketing.
  • The retail stores will come back, likely next year, Baker says.
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