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Alicia Keys Athleta Clothing Line Debuts in Push to Grow Brand to $2 Billion

By Jordyn Holman

Athleta has been on a tear, and now it’s up to Mary Beth Laughton to keep the boom going.

The former Sephora and Nike executive took over the women’s sportswear brand that’s owned by Gap Inc. near the end of 2019. Then the pandemic hit and caused a surge in sales of yoga pants and sweatshirts — Athleta’s core — as many Americans worked from home. The brand’s annual revenue rose to $1.45 billion at the end of last year from $978 million in 2019 — a 48% gain.

Alicia Keys (pictured performing in 2019) is launching a clothing line with Athleta. Photographer: David Paul Morris/Bloomberg

Gap is so high on the brand that it has forecast Athleta’s sales to reach $2 billion in the fiscal year ending in January 2024, which means it would more than double sales in four years. To get there, Laughton has further pushed Athleta, which was founded in 1998 and acquired by Gap a decade later, into celebrity marketing.

The latest outgrowth of that came on Tuesday when Grammy-winning artist Alicia Keys debuted a line of colorful tights, tops and jumpsuits. The brand had already taken similar paths with Olympic stars Allyson Felix and Simone Biles. Bloomberg talked to Laughton about where she wants to take Athleta, the brand’s competition with Lululemon and if a men’s line is in the works.Gap bought Athleta for about $150 million, and now the brand is headed toward $2 billion in sales. How are these partnerships going to help get you there?

It’s really about that awareness factor and letting women know who we are as a brand. We saw strong brand awareness lifts in the second quarter during the Olympics when we introduced Simone, and that continues to be the case with these different partners.

By signing deals with star athletes, Athleta looks like it wants to become a bigger player in the performance apparel category that has been dominated by brands like Nike. What would you say to that?

What’s really been unique about our brand is that we have offerings for women for their full lives. Roughly half of our assortment is in sweat product, and Allyson and certainly Simone, particularly on the girls’ side, can help represent that.

But half our assortment is more on this performance lifestyle side, which is this highly versatile product. Alicia is coming in to really help represent that side of the assortment.

Athleta often gets compared to Lululemon because there is so much overlap with products like yoga pants. With these partnerships, do you think Athleta will be able to separate itself more from Lululemon and poach some of its customers?

Our values are our differentiator. We are a female-focused brand. We don’t have men’s. We also have the strong values around inclusivity, sustainability and women supporting women. Once we can introduce women to those values, I think many of them are eager to come and be part of our brand.

All three of your partners are Black women. Since they were signed, have you seen changes in the racial demographics of your customer base?

I do think the work they’re doing helps amplify diverse voices for our brand. We are going to continue to look for ways to do that. They certainly are helping with that.

Where would you look for your next endorsement deal? WNBA? College? More entertainers?

All of the above.

In this category, brands usually try to go after one sex and then the other sex. Nike and Under Armour began as just men’s and then started a women’s business. Lululemon took the opposite path. Is there an Athleta men’s line on the current roadmap?

No, it isn’t right now because we are a brand for women and by women. Our focus on understanding women and supporting women is really unique in the marketplace.

More stories like this are available on bloomberg.com

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