Outdoor Voices is in the middle of a firestorm after former employees have revealed the troubled activewear company is headed towards bankruptcy, following reports that the brand is closing all stores and transitioning to an online-only retail model.

The brand has seemingly removed all of its 15 brick-and-mortar retail locations nationwide from its website. 

The news of the potential insolvency was first reported by Sourcing Journal, which cited former Outdoor Voices employees with close knowledge of the matter. The activewear brand has also missed rent and vendor payments in recent months, according to the publication, and gave pink slips to most of its corporate employees.

According to another report, from Puck News, Outdoor Voices has already closed all of its retail locations and intends to focus solely on its e-commerce business.

Rise & Fall

Like Lululemon, Outdoor Voices has developed a cult-like following as devotees of the brand have embraced its merchandise as much as its #doingthings lifestyle ethos. Founded in 2013 by Tyler Haney, the brand moved from its New York City roots to Austin, Texas, as it grew. 

By early 2020, right before activewear and athleisure began to see a pandemic-related boom, Haney stepped down as CEO during restructuring efforts. Internal strife had been brewing and an anonymous letter had been sent to the Outdoor Voices’ board and executives that targeted Haney for her management style.

Financial troubles were also percolating, with the company’s valuation down to $40 million in 2020, a steep decline from its 2018 valuation of $110 million. By 2021, the brand had named Gabrielle Conforti, former Urban Outfitters president, as its CEO. 

The activewear company had begun shopping for a buyer in 2022, according to Business of Fashion. 

Haney may have been out of the picture, focusing on Joggy, a cannabis supplement brand, but she appeared to find time to keep a watchful eye on the brand she founded — even leaving comments last year on Outdoor Voices’ social media posts that indicated she had felt the brand had lost its way. 

Now, with news swirling of a potential Outdoor Voices bankruptcy, the active Reddit community on r/OutdoorVoices has been posting images of closed stores, many with notes in the windows that have the Venmo handles of former employees. One photo from a shop in Minneapolis reads, “Our (chairwoman) Ashley Merrill refuses to pay anyone severance. We appreciate anything that you can give. All funds will go directly to this staff. Thank you!” 

Activewear Brands Struggle Post-Pandemic 

It’s been a trying time for some in the activewear game, with leggings giant Lululemon even admitting that it will remain cautious in 2024 in the face of market uncertainty.

Gap’s activewear arm, Athleta, reported an 18% net sales drop in its third quarter of fiscal 2023 compared to the prior year, noting in its earnings release that sales continued to be a challenge. Athleta has said it would work on re-engaging its core customers.

Activewear brand Bandier had also been looking for a buyer to mitigate supply chain challenges before getting acquired along with Carbon38 by BC Brands in January. 

More traditional sportswear giants have also seen some headwinds. Under Armour also reported slowing sales, and Nike cut its annual revenue forecast, announcing a $2 billion cost-savings plan that included restructuring.

One outlier is Gymshark, which recently reported a rather uncommon push-and-pull situation, having experienced slumping profits in 2023 (reporting $16.5 million, down from $35.3 million) but a 15% revenue increase. The brand, founded and led by U.K.’s youngest billionaire, Ben Francis, is going full-steam ahead. 

Outdoor Voices didn’t immediately respond to Athletech News’ request for comment

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Athleta has dropped a new activewear collection with advanced, no-slip fabric technology made for the most intense, high-impact workouts. 

It’s a crowded space, the activewear game — especially as brands and retailers clamor for the spending power of women, who account for nearly 60% of activewear sales. In recent weeks, fitness pioneer Tracy Anderson and Calia, a women’s performance wear brand sold exclusively at Dick’s Sporting Goods, have debuted women-focused activewear that places fabric functionality at its core.  

Athleta’s new Train Collection is not only innovative, it brings to life the brand’s mission to empower women through movement, said Casey Schumacher, senior director of design.

“With this launch, Athleta continues its commitment of creating products for real women with our obsessive attention to every detail,” she said.

The Gap-owned brand says it conducted third-party lab testing to perfect the eight-piece activewear collection, $69 – $135, to achieve the ideal fit, design and functionality for active women.

“We wanted to ensure we created a product she could jump, lift, sweat and move in without distraction,” Schumacher explained.

Athleta’s new collection relies on the magic of its PowerMove fabric, crafted partly from post-consumer plastic bottles (yet comfortable) while offering active-friendly coverage and stretch.

The brand says its Train Collection is “anchored” by  Interval Tight, which includes two lengths of high-performance leggings, capris, shorts with stay-put bonded waistbands and a fitted jacket with a removable hood.

For pre and post-workout style or layering purposes, Athleta has also included an Unstoppable Fleece assortment with ‘Flex Fleece,’ a new fabric made with spandex and recycled polyester fiber. A zip-up, lightweight jacket, vest and joggers are available, all quick-drying for the comforts of outdoor training.

Athleta also took care to include pockets in the pieces of the Train Collection for streamlined storage needs.

Sportswear Slump

Activewear and athleisure may have boomed during the pandemic, but brands are facing a more challenging environment at the moment.

Gap reported Athleta’s net sales for the third quarter of fiscal 2023 were $279 million, down 18% compared to the prior year. The apparel company noted in its earnings release that Athleta’s sales in the quarter “continued to be challenged” and indicated that the brand would work to “reengage its core customer through better product and brand right marketing.”

Athleta isn’t alone — Under Armour is also facing a sportswear slump after reporting slowing sales. Last month, Nike cut its annual revenue forecast and announced a $2 billion cost-savings plan involving layoffs at the sportswear giant.

Lululemon, a leader in the active and athleisure space that joined the S&P 500 last year, also remains cautious in the face of market uncertainty as it enters the men’s footwear space. Although Lululemon’s men’s line saw a 15% growth in 2023’s third quarter, brand awareness has remained low in the U.S. and even more so outside of North America. 

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Gap Inc. has appointed Chris Blakeslee, formerly of Alo Yoga, as Athleta’s new president and CEO.

Athleta, founded in 1998 to serve athletic women, was acquired by Gap Inc. in 2008. The activewear brand now operates over 200 stores in the U.S. and Canada. 

Blakeslee will join the activewear brand on August 7, overseeing strategic growth and product innovation. He will also continue Athleta’s mission, “Power of She,” which launched in 2016, providing grants and advocacy work for women and girls. 

Athleta’s new president and CEO has held various roles across marketing, sales, product portfolio management, and operations, coming to Athleta after serving as president of Alo Yoga and Bella+Canvas since 2017.

Under Blakeslee, Alo Yoga grew to over $1 billion in sales in 2022, nearly doubling its year-over-year growth.

Athleta’s parent company Gap Inc. also named its own new CEO, Richard Dickson, of Mattel. Dickson replaces Sonia Syngal, who led Gap for two years. The executive changes have reflected positively on shares of Gap, which are up nearly 6% in the past five days. 

While activewear may have seen a boom during the at-home fitness craze, according to a report by McKinsey, athletic footwear and activewear saw revenue declines of 4 to 6% in the first nine months of 2022, resulting from weakened consumer demand.

In its Q1 2023 financials, Athleta reported net sales of $321 million, down 11% when compared to last year, with sales in the quarter impacted by “continued product acceptance challenges.”

Still, Gap is rallying behind the new leader of Athleta to change course.

“A true brand champion, Chris is known for driving results in high-growth businesses through the blend of creativity and operational rigor,” said Bob Martin, executive chairman and interim CEO of Gap Inc. “Chris is a strong, decisive leader and proven business driver across multiple industries, including active apparel and wellness – one of the fastest and most aspirational retail sectors – making him well suited to guide Athleta into long-term, sustainable growth rooted in delivering high-quality performance product and a rich omni shopping experience.”

Blakeslee, who holds an MBA from John Hopkins University, commented that he’s long admired the Athleta brand.

“I see incredible runway for the brand to capitalize on its unique, purpose-led positioning and performance product innovation, leveraging its assets across marketing, stores, product and community to deliver consistent growth,” Blakeslee said. “There is something really captivating about the ‘Power of She’ when it comes to engaging women and girls in all aspects of life, and I can’t wait to jump in with the teams to harness this in a way that will further serve customers’ wants and needs.”

Athleta appointed Julia Leach as chief creative officer in May.

This past spring, Athleta announced a partnership with elite athletes to empower women and girls and made a $175,000 donation to the Women’s Sports Foundation to advocate for women’s equality in sports and life. 

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Shares of Adidas plummeted on Friday after the sportswear company confessed that its breakup with Ye, formerly Kanye West, is expected to cost the company roughly $1.3 billion in revenue.

That is, unless Adidas finds a way to offload its inventory of Yeezy merchandise. But if the sportswear brand can’t repurpose its Yeezy stock, Adidas says it will cost the company over $530 million in operating profits. 

In a statement regarding its financial guidance, Bjørn Gulden, Adidas CEO, wrote, “Should the company irrevocably decide not to repurpose any of the existing Yeezy product going forward, this would result in the write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional € 500 million this year. In addition, Adidas expects one-off costs of up to € 200 million in 2023. These costs are part of a strategic review the company is currently conducting aimed at reigniting profitable growth as of 2024.”

“If all these effects were to materialize the company would expect to report an operating loss of € 700 million in 2023,” he continued.

In response, shares of Adidas dived as much as 11%.

Adidas also said it expects ‘currency-neutral sales to decline at a high-single-digit rate’ in 2023 and that its underlying operating profit is projected to be around the break-even level.  

“The numbers speak for themselves. We are currently not performing the way we should,” wrote Gulden. 

Gulden went on to share that this year will be one of ‘transition’ to become a growing and profitable company.

“We will put full focus on the consumer, our athletes, our retail partners and our Adidas employees,” he said. “Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that Adidas is a great and fun place to work. Adidas has all the ingredients to be successful: A great brand, great people, fantastic partners and a global infrastructure second to none.”

However, he warns that Adidas needs to ‘put the pieces back together again,’ and that it’s an undertaking that will take some time.  

The sportswear brand cut its nearly ten-year partnership with Ye last fall over his racist and antisemitic remarks. Adidas released a statement condemning Ye’s remarks, saying that the company does not tolerate antisemitism and hate speech, and called his comments and actions ‘unacceptable, hateful and dangerous.’ 

Adidas said it decided to end production of Yeezy-branded merchandise and stop all payments to the rapper/designer/producer. 

While announcing the end of Yeezy, Adidas did note that it was expected to have a ‘short-term negative impact’ on its net income in 2022.

Adidas is one of many brands to have cut ties with Ye. Sketchers, TJ Maxx, Gap, Footlocker, Vogue, and Peloton were all among the many brands to distance themselves from the controversial artist. 

The brand is also struggling with its Ivy Park Adidas line, which saw sales fall 50%, according to The Wall Street Journal. The contract for Ivy Park, headlined by Beyoncé, expires after next year.

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Saysh, a lifestyle brand co-founded by Olympian Allyson Felix and her brother and business partner, Wes Felix, recently completed an $8 million Series A funding round. IRIS and Athleta led the Series A, with Redpoint Ventures and Springbank Collective also participating.

The exciting business news follows Felix’s announcement of her impending retirement. “Here’s to my final season,” she shared on Instagram.

Gap Inc.’s Strategic Growth Office facilitated Athleta’s investment, with Gap acquiring an equity stake in Saysh.

The women-focused lifestyle brand will use the new funds to expand its branded eCommerce, wholesale distribution, and community-based retail footprint.

Saysh will also be using the Series A funds to launch its activity-specific sneakers. 

“This is an exciting next step for the brand, and we’re so grateful to those partners who see the potential for Saysh to help shape a better future for us all,” said Wes Felix, co-founder and CEO. 

“Saysh, at its core, celebrates women and their voices, and this funding further empowers us to lead in that regard. We are now, more than ever, positioned to understand and meet the needs of our customers, delivering more value than ever before.”

Saysh’s footwear will now be featured on Athleta’s website as part of the new partnership.

Felix and Athleta have worked together in the past. Felix collaborated on an athletic wear collection and The Power of She Fund: Child Care Grants, a program that helped fund childcare costs for pro mom-athletes traveling to competitions.

“When we signed Allyson Felix as our first-ever sponsored athlete in 2019, we knew we wanted to do things differently by supporting her as a mom, athlete and advocate,” said Mary Beth Laughton, president and CEO of Athleta. “Today we are proud to continue supporting Allyson as an entrepreneur while fueling growth to the Athleta brand with our investment in Saysh.”

The female-focused founders created the Saysh One, $150, sneakers designed with women in mind. The brand has been intent on being attentive to the needs of women from the start; the company even implemented a Maternity Returns policy, which acknowledges how pregnancy can alter shoe size. Customers who become expectant mothers are eligible for a free replacement pair of Saysh One sneakers in their new shoe size under the policy.

The brand will release new Saysh One colorways to commemorate Felix’s final season. The new colors will be available this summer.

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Women who love Athleta will soon have a safe space to talk all things wellness. In late July, the performance apparel brand unveiled the launch of AthletaWell. AthletaWell is described as “an innovative and immersive new platform designed to build loyalty, engagement and a community of empowered women.” Anyone who signs up for AthletaWell will be able to talk with others about a myriad number of health-related topics, including fitness and body positivity. The platform will have different sections as well such as “Spaces,” “Guides,” where users can gain insight from wellness and health leaders, and “Online and offline activations.” 

Athleta’s Chief Digital Officer Kim Waldmann states, “We’ve heard from our customers that wellbeing is a complex journey, rich with questions and there isn’t a place where women can talk about it holistically or discover the best solutions. We’re excited to offer AthletaWell, a new digital platform for women to help each other navigate the complexities of modern-day womanhood and to connect our customers in a way that will enhance their overall experience with the brand in a meaningful way, thus, creating even more brand loyalty over time.”   

WWD notes that AthletaWell is all a part of Athleta’s overall plan to acquire $2 billion by 2023. In addition, CNBC states that the retailer is up against heavy competition from other labels entrenched in the athleisurewear market (Nike, Adidas, Outdoor Voices, Target). In January, The NPD Group reported that activewear buyers at the time were “spending 11% more per purchase compared to non-activewear buyers.” Their study added, “These buyers also spent more on both men’s and women’s activewear in 2020 compared to the prior year, while less has been spent on non-active apparel.” In the advent of more people spending time at home for work, school and otherwise, due to the COVID-19 pandemic, stylish comfort appears to have been a larger priority for consumers.  

AthletaWell will be available, and free, for Athleta Rewards loyalty members. Interested parties can find more information via community.athletawell.com. 

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