Founded in 1998, Athleta sells apparel to active women across a range of activities, including yoga, running, cycling, hiking and skiing. Targeting 30 to 50 year olds, it's one of the largest catalog and online stores in the space and was acquired by The Gap for $150 million in 2008
"It's been strong double-digit growth ever since we bought the brand and it was strong double-digit growth before we bought them," Toby Lenk, president of Gap Direct, the unit that oversees Athleta, told Reuters.
The 5,000 square-foot store on Fillmore Street in the city's tony Pacific Heights neighborhood comes after the successful test of a smaller "laboratory" store in Marin. Gap found that for every dollar that customers spent online in the Marin region, they spent an additional $4 in the store.
"The majority of customers in this space won't buy a product if they can't try it on in the store," Mr. Lenk told Bloomberg. "That's very clear to us -- we're the only major small specialty brand competing without a store."
The closest competitor will be Lululemon, which last week once again raised its quarterly estimates. With sales per square foot averaging over $1,500 and comps climbing in the mid-to-upper-twenties in the latest quarter, the quirky retailer is known for its yoga-trained staff, local brand ambassadors, inspirational mantras and in-store yoga sessions. Beyond yoga, Lululemon is also tapping strong general trends supporting running and fitness.
Another women's-only concept is Lucy Activewear, which is owned by VF Corp. and has 65 stores. Sporting goods and footwear chains are also testing newer concepts to reach active consumers looking for premium brands and better service. These include S.A. Elite from The Sports Authority, Mind Body Sole from Famous Footwear and Foot Locker Run by Foot Locker.
The Gap is also targeting active women at its flagship stores with its GapBodyFit collection and at Old Navy with its GOGA-GO (Go out Get Active) line. But Athleta most directly targets the opportunity.
When Gap "looks at how big and explosive Lululemon has done, and here they have this brand they've been incubating online, I think right now is a good time to start opening the stores and potentially doing something bigger," Brian Sozzi, an analyst at Wall Street Strategies, told Bloomberg.