The rapid growth of the American yoga pants economy: Vuori receives SoftBank investment and aims to challenge Lululemon's market position

In the free and open United States, many companies and workplaces prohibit wearing yoga pants. These tight-fitting, close-fitting exercise pants have gradually become a symbol of fashion and popularity. Many people wear yoga pants all day to show off their bodies, even if they don't attend yoga classes. Lululemon started the trend of yoga pants, and I call this emerging market the 'yoga pants economy,' emphasizing health, sexiness, and leisure. Now, many venture capitalists are also optimistic about this market and invest in emerging sports brands, hoping to find the next Lululemon.

An interesting fact from Pornhub is that yoga pants are one of the popular search keywords on the website. In formal work settings, Americans generally have conservative thinking and do not want female colleagues to wear tight yoga pants to work, unless they work for a new tech company like Silicon Valley in California. Most employee handbooks explicitly prohibit wearing yoga pants to work. However, there is a company called Vuori that has emerged as a challenger and even received investment from SoftBank. It aims to challenge Lululemon's market position and was valued at $5.5 billion last year. It has also raised $825 million in funding and may go public with an IPO. How did this company achieve such success?

Vuori impressive profits Analysts are optimistic about the IPO

Vuori's full-year revenue in 2023 is about $320 million. The sports and leisure brand based in Southern California quickly gained market share in the market dominated by Lululemon and Alo Yoga. In 2021, it received a $400 million investment from SoftBank, the largest investment in a fashion brand by venture capital that year. In November 2024, Vuori received a new round of $825 million investment from General Atlantic and Stripes. Analysts believe that Vuori is likely to go public in the near future.

It is rare to see brands that target male customers in the market. Vuori entered the market with 'men's athletic shorts', making men's athletic shorts a unique product in a female-dominated consumer market. Vuori's marketing strategy is to sell in high-end gyms like Equinox, shaping a high-end brand image. Vuori is also actively opening stores next to its competitor Lululemon and preparing to rapidly expand with 100 new stores globally by 2026.

Sports leisure dress quickly grows to catch up with fashion trends

CNBC reported that two-thirds of the millennial and Z generations wear sportswear multiple times a week, with 6% of the Z generation considering fitness very important. Analysts believe that many emerging newcomers will challenge the market position and market share of four 'old brands' (Nike, Adidas, Puma, and Under Armour), and even surpass the four major old brands with an annual revenue growth rate of 18% and a 4% increase in profitability.

According to the McKinsey Fashion Index report, McKinsey analysts are optimistic about the continued growth of sportswear revenue by 2025, with the growth of sportswear expected to exceed the overall fashion market. China is expected to surpass the growth by 5 to 6 percentage points (%), the United States by over 3%, and Europe by 2 to 3%. Additionally, as many as 90% of sportswear brands are expected to maintain steady growth in sales. The emerging brands that analysts are optimistic about include New Balance and Alo Yoga, and they believe these brands will further energize the overall sport and leisure market.

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