Athleta plots expansion with Simone Biles deal and new chief brand officer

Athleta has long been a bright spot in the Gap Inc. portfolio since the San Francisco retail conglomerate bought the sportswear brand for $150 million in 2008. Now the female-focused brand is trying to grow even brighter with a new deal with Olympian Simone Biles that signals a more aggressive pursuit of big-name athlete backers—a strategy that has long been the calling card of rival Nike. Athleta, now a $1 billion brand, lured the A-List Olympian from Nike in a deal publicized last week that followed the 2019 signing of running champion Allyson Felix , also an ex-Nike endorser. While Nike still has plenty of big-name female players, including tennis greats Serena Williams and Naomi Osaka, Athleta's moves have caught the eye of analysts, whom expect more deals to come. “Athleta has shown it wants to become more performance-oriented and so you need athletes wearing the product in order to create that performance aura,” says Matt Powell, VP and senior industry advisor, sports, at NPD Group. To help with its expansion efforts, Athleta this month hired Kyle Andrew as chief brand officer. A veteran marketer with stints at American Eagle and Kate Spade under her belt, Andrew will head up marketing efforts and continue the “Power of She” messaging that has resonated with the brand’s female customers. Sheila Shekar Pollak, formerly Athleta's chief marketing officer, left the brand last year to join clean skincare brand Biossance. "Today more than ever customers are looking for ways to connect with brands beyond the transaction," says Jana Henning, Athleta's chief product officer, "As a values-driven company, we’ve had a long focus on how we bring to life our mission of empowering women and girls and communicating that we see business as a force for good. Our brand storytelling is a key vehicle for sharing these values with our customer and introducing new customers to our brand." On an early March earnings call with analysts, Sonia Syngal, CEO of Gap Inc., called out Athleta’s stellar performance in 2020, a time when many consumers were focused on sporting apparel and also the leisurewear items like leggings and hoodies for which Athleta is known. The brand, Gap Inc.’s highest margin business, grew 16% last year to exceed $1 billion in sales—in the crucial fourth quarter holiday season, Athleta saw net sales rise 29%. Syngal says it is on track to reach $2 billion by 2023. “We have never been more confident in Athleta's path forward,” she said on the call. Biles is expected to play a large role on that path, particularly by focusing on Athleta Girl, the brand’s kidswear line. The gymnast will work with Athleta’s design team to create signature products and multiple capsule collections for Athleta Girl, and will also assist in advocacy efforts for young athletes. The deal will reportedly include Athleta's sponsorship of a gymnastics tour after the Olympics. Executives noted that Biles shares the brand's values. "Simone is a once in a generation athlete, who inspires women and girls of all ages with the confidence to go for your goals and use your voice," says Henning. In a statement announcing the collaboration late last week, Biles said she admired Athleta’s commitment to women’s strength. “Using my voice has been very empowering for me and I am grateful to embark on this new journey with Athleta to inspire young girls and women to do the same,” she said. At Nike, which has been criticized in the past for its treatment of female athletes, including by Felix, Biles’ deal was not tied to any products, so the new work with Athleta appears to be more lucrative for the 24-year-old gold medalist. “Nike was basically just using her as an endorser—it didn’t really support any merchandise play,” says Powell. “As an athlete, wanting to have your own product line is a motivator.” Many consumers, fans of Athleta for its diversity and inclusivity efforts, applauded the deal. @Athleta is one of my preferred brands. I appreciate the range of sizes and model diversity they use in the catalogs. Signing @Simone_Biles is amazing news! #femaleathletes https://t.co/wUa9ud368A— Megan Maurer (@mtws31) April 23, 2021 I love @Athleta ! I have purchased many of their products - love their message of inclusiveness ie; different body types. They previously had some of their products in plus size but now there are so many more. Us Thick Girls like to workout too! Great move @Simone_Biles !!— TiffSBDC (@TiffSBDC) April 23, 2021 Biles is expected to help Athleta cement its reach with a younger generation of shoppers who crave more authentic brands that align with their values. “Simone Biles is younger and she really resonates with a younger girl—be it a teenager or a woman in her 20s,” says Gabriella Santaniello, founder of retail consultancy A Line Partners. “That’s important—it’s good when you get that younger customer because she develops a loyalty and moves on in the sizes to end up with the adult sizes.” Already, marketing has helped identify Athleta to customers as a brand that celebrates women’s empowerment. The brand, one of a growing number of apparel B Corporations that are purpose-driven with their profits, highlights a diverse range of body types, sizes and ethnicities in its catalogs. A recent campaign, done by long-time agency partner Yard NYC, showcased Athleta’s newly expanded line of sizes, from XXS to 3X. Called “All, Powerful,” the body-positive video featured models in each size. Syngal noted the campaign taps into Athleta’s “mission of inclusivity.” The brand also recently added sleepwear to its product mix, which includes a range of apparel for a host of activities including hiking, swimming, yoga and even casual office-wear. This year, Athleta will add some 20 to 30 stores to its 200-plus fleet. "Their female-centric messaging resonates because it is a genuine reflection of a company created by women for women," says Ruth Bernstein, co-founder and CEO of Yard. "Their particular brand of purpose-driven messaging attracts women who share their values because they are authentically communicating with heart, not hype." Yet rivals—chiefly Lululemon, which targets a similar customer—are also in growth mode. Lululemon saw sales surge last year as customers flocked to its apparel and the company is also making inroads with its burgeoning men’s business. Retail experts say Athleta, which is planning to open stores in Lululemon’s native Canada, would do well to develop some must-have products, like a “Simone Biles pant,” for example, in order to differentiate their offerings as exclusives. “As they evolve and form some of these partnerships with athletes, they’ll need to bring some personality to the brand and those are the challenges,” says Santaniello. “They’ve done a phenomenal job with covering different categories, but they don’t yet have something everyone dies to have.”

Athleta plots expansion with Simone Biles deal and new chief brand officer

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