Gap Inc.'s female-targeted Athleta brand produces the kind of clothes likely to make even the most devout couch potatoes want to work out. Sure, the nifty hidden pockets and technical fabrics are cool, but the workout wear sports design innovations that eliminate the dreaded "muffin top."
"The thing that differentiates Athleta is we have product that really performs," said Tess Roering, VP-marketing and creative, during a tour of one of Athleta's new Manhattan stores as she prodded, stretched and turned items inside out. "We really focus on women. Our designers are women, and they wear-test it themselves." As for the muffin top, that 's when extra fat hangs over the waist of pants, Ms. Roering helpfully explained.
Founded in 1998, the brand targets female athletes in the fast-growing $31 billion women's active wear market. In 2008, Gap Inc. acquired the catalog and online retailer for about $150 million, and now it's investing further with stores in premium locations. Earlier this week, Ms. Roering gave Ad Age a tour of Athleta's new shop at 216 Columbus Ave. in Manhattan. A second location also opened across town this week at 1517 Third Ave.
Gap Inc. does not break out Athleta's sales, though it's called it an up-and-coming brand with "huge" potential. Here, Ms. Roering talks about Athleta's expansion plans, agency partners and the next big thing in sports.
Ad Age : After this week you'll have four stores, two in California and two in New York. What other expansion plans do you have?
Ms. Roering: We started with one [a year ago] that we called a "lab store" just to see how the concept worked. We hadn't had a retail store before, so [we were asking ourselves] "How do we make sure that this catalog shows up in a really authentic way in the store experience?" That store was such a huge success and continues to do well. Each store we have, the market around it has grown four fold, without cannibalizing existing sales. It looks to be a very, very big opportunity. So, we expect to have eight to 10 stores by the end of our fiscal year, which is the end of January. And our projection is that we'll have 50 by the end of 2013.
Ad Age : Athleta is one of five Gap Inc. brands. What synergies are there?
Ms. Roering: We get to benefit from all of their expertise. Things like their strategic sourcing team and the real-estate team. We didn't have to go out and build that expertise from scratch. But we're in a different location up in Sonoma County, not in San Francisco. We're really a separate brand. We have everybody in-house: design team, merchandising team, production team, marketing, even the call center. It gives us a chance to really communicate with each other and learn so much more about the customer. With the call center right there, I can -- and do -- put on headphones and listen in on customer calls and find out what she's asking about.
Ad Age : How is the addition of stores affecting marketing?
Ms. Roering: [The team has] grown a touch. We've always had an in-house creative team. We have a production team, we do our online and catalog design, our retail design. We're now starting to do sponsorships, advertising, more PR, so we've grown a little bit, but we're still really lean. We did do a short-term product with [Minneapolis independent agency] Peterson Milla Hooks. When we're a lean team, the idea of taking them off their jobs for a month or two to figure out our next big campaign was out of the realm of possibility. So we took a small team and partnered with PMH on a four-month project. We're going to launch a whole new creative campaign against all channels next spring.
Ad Age : Will you continue to work with PMH?
Ms. Roering: We could partner with them in the future. We had a great experience. And we're really happy with the results. But at this point we're planning to take it from here.
Ad Age : Some of us who are runners at Ad Age are starting to think that triathlons are going to be the next big thing. What do you think?
Ms. Roering: Absolutely. Based on anecdotal evidence, I believe that to be true. Women are looking for a new challenge. Doing a running race is just an easier thing to train for. Training on three sports is much more of a challenge and commitment. That's the kind of thing we'd love to do with the stores, have a triathlon-training program.
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