Even as COVID-19 cases decline and many Americans consider returning to work, the mass populace has become comfortable, quite literally, with its relaxed at-home wardrobe. To fuel that trend, apparel tenants that specifically cater to the comfort clothing/athleisure niche are boosting their expansion goals and developing easygoing attire that can successfully merge from at-home loungewear to presentable-yet-comfy clothing for going out in public. As industry leader Lululemon focuses on expansion overseas, look for other brands, such as the Aerie spinoff, Offline by Aerie, Athleta, Fabletics, the Free People spinoff, FP Movement, and up-and-coming male-focused brands in the category, namely West Coast-based Vuori Clothing and East Coast-based Rhone, to dominate with expansion for the foreseeable future. Because this casual-clothing category feeds into the national fixation on health, wellness and beauty, preferred co-tenants include cosmetics and skincare retailers, fitness centers, yoga studios, health food restaurants and upscale apparel brands.
Offline by Aerie, the offshoot casual/activewear brand developed from the teen-oriented Aerie intimates brand (which itself is a spinoff of American Eagle Outfitters), will open up to 30 new units this year, followed by 35 to 50 units per year until then end of 2023/early 2024. Offline by Aerie is bullish on growth, especially after activewear proved to be the top-selling growth category in its Aerie stores last year. After targeting indoor and outdoor mall spaces in suburban family-friendly higher end markets throughout the Northwest, look for Aerie to eye growth for 2022 and beyond toward the Sunshine states, especially high-end suburban markets throughout Northern and Southern California, Houston, Dallas/Fort Worth, Atlanta and Phoenix. Midwest markets, such as outlying areas of Kansas City, Mo., and Northwest cities, including areas near Seattle, will also be targeted. Offline by Aerie is especially looking at affordably priced mall space, in the 1,800- to 2,500-s.f. range, in shopping centers that already house one of its other brands. Its Offline by Aerie unit does not need to be directly across from its other brands, or even on the same floor, and ideal co-tenants include other brands popular with teenaged girls, such as Bath & Body Works and PacSun.
Athleta expects to finish 2021 by opening up to 30 new units, followed by 30 to 35 new stores per year over the next three years. The exercise clothing company looks for space in the 3,200- to 5,200-s.f. range primarily in strip centers but will also consider lifestyle centers and power centers with preferred co-tenants including upscale grocery stores, such as Sprouts Farmers Market, as well as fitness brands, such as Orangetheory Fitness. Athleta’s target audience is the Gen X mom for its premium priced athletic and casual comfort wear. Upscale suburban areas will be eyed, especially in smaller markets with a population in the 200,000 range located within 30 to 45 miles outside of a major metro where the brand already has a presence. Anticipate growth in the South and the Southwest, especially in Texas and Georgia, which will be facilitated by its seventh fulfillment center set to open in Longview, Texas, in August of 2022. Athleta is the most profitable brand under the Gap Inc. umbrella, and its net sales surpassed $1B in 2020. The retailer will be introducing inclusive sizing and sleepwear products this year.
Fabletics expects to open approximately 20 to 30 new units per year over the next two years. The brand is looking for units in the 3,000- to 4,000-s.f. range, an increase from its previous store average of 2,300 s.f., due to its partnership with the rowing machine brand, Hydrow, announced in October. Hydrow machines will take up space in Fabletics’ upcoming units for in-store demonstrations. Preferred locations are in Class A malls, either indoor or outdoor, near major metros, within close proximity to multifamily developments, office spaces and higher-end gyms, such as Equinox. The targeted demographic base is fashion-conscious, college-educated single women in the 21- to 32-year-old range who work out regularly, in addition to health-minded women up to age 45. Mall co-tenants should include other high-end female clothing brands geared to the same demographic, such as Madewell.
Look for high-income markets near Kansas City, Mo., Denver, Dallas and Raleigh-Durham, N.C., to be targeted. Fabletics has steady traffic to its stores thanks to its VIP membership option, in which customers can take advantage of monthly deals, and the brand plans to host events in its stores, such as group workouts.
FP Movement will open 10 new locations in 2021 and anticipates opening between 25 and 35 new stores per year over the next three years. Having made its brick-and-mortar debut with three units that opened last year as an offshoot of the Free People retail brand, FP Movement has already shown higher average unit retail numbers than the Free People branded stores. The FP stores will primarily be located in secondary markets, including college towns. The brand targets upscale Class A malls, preferably outdoor, as well as street-front mixed-use retail and lifestyle centers for retail space in the 1,450- to 3,000-s.f. range. Preferred co-tenants include other upscale youth-oriented chains for females, such as Zumiez and Kendra Scott. Look for potential future markets to include Columbus, Ohio, Scottsdale, Ariz., Orlando, Fla., and areas near Nashville, Tenn., Seattle, Miami and Atlanta. The targeted audience is the female customer in the 18- to 28-year-old range. The stores, which sell casual fleece outerwear/fitness-oriented lifestyle clothing as well as wellness and clean beauty items, will also provide in-store activities, including mediation/yoga sessions.
Vuori Clothing, a men’s outdoor performance/loungewear brand that began selling women’s clothing two years ago, expects to open between five and 10 new units per year over the next two years. Stores tend to be in street-front retail districts and open-air lifestyle centers both in downtown metro mixed-use destinations, as well as high-end neighborhood developments close to fitness centers and outdoor activity areas near beach or mountain destinations. With six stores in California, Vuori opened its first unit in a new state last month with its location in the Boulder, Colo., Macerich-owned Twenty Ninth Street outdoor shopping mall, where the store is next to an Anthropologie and near a Sunglass Hut. Other potential sites the brand indicated it may seek for growth include Scottsdale, Ariz., Denver, New York City, Chicago, Portland, Ore., Seattle, and Austin. Its sites are generally in the 1,000- to 1,800-s.f. range and in close proximity to fitness gym brands, such as SoulCycle. Vuori received $45M of investment money from Norwest Venture Partners in 2019 and hired a former Lululemon executive last year to oversee retail operations growth.
Although Rhone only has five stores — three in New York City, one in Stamford, Conn., where the brand is headquartered, and one in Boston — the men’s premium activewear/lifestyle brand opened two of those units within the last three months, its most recent being the 1,100-s.f. Boston store that opened in May. Rhone has hinted at future expansion throughout the Northeast, and potentially into the Midwest, with Chicago being a likely location for an upcoming store. The brand also has a warehouse location in Draper, Utah, so potential growth into flourishing Western regions, including Salt Lake City, Denver, Las Vegas and possibly even Phoenix and Scottsdale, Ariz., is a strong possibility. Rhone prefers small space, in the 1,000- to 1,500-s.f. range, on street-front retail in urban metro areas close to offices, multifamily developments, popular fitness gyms and other activewear tenants, such as Nike. Rhone already has brand recognition due to its items being sold in Equinox gyms, Peloton Studios and JackRabbit shoe stores. Through a partnership with Tonal, the wall-mounted fitness machine brand, its stores will also sell fitness equipment products. Rhone, known for high-end athletic wear, also sells collared shirts and slacks in its comfortable flex knit stretch fabrics.
