Analyzing Vuori: Joe Kudla’s Athleisure Startup Makes Billions

Vuori is a clothing brand that has truly crushed it in recent years. The demand for performance activewear and athleisure continues to grow, with a market size of more than $350 billion. So this retail sector is one to watch.

Thanks to the size of the market, there’s plenty of room for newcomers to compete with major brands, such as Adidas and Nike. Out of these smaller clothing startups, Vuori stands out as a true success story. They’ve cemented their place in the industry, thanks to the selection of high-quality, comfortable clothing for men & women they offer.

The person behind the brand, Joe Kudla, remains the majority owner and CEO of the company. He launched his startup only a decade ago and may soon file an IPO. So, how did he manage to create one of the most popular athleisure brands even with all the competition out there?

In this article, we’ll explore the history of Vuori, including exactly how Joe Kudla turned his idea into a $4 billion company.

 

 

Filling a Gap in the Activewear Market

 

Joe Kudla launched his vision for a clothing company in 2014, after quitting his job as a consultant. As is often the case with entrepreneurs, Kudla saw a gap in the market. He noticed that the biggest activewear brands didn’t really market to men.

There was a lack of versatile activewear that guys could wear just about anywhere – from a workout to a casual social setting or running errands. There’s no shortage of similar options for women, thanks to the wide range of leggings, jeggings, and tank tops that brands like Lululemon offer.

So, how did Kudla come up with the idea for Vuori? First, we need to recap his early history.

 

From Modeling and Accounting to Entrepreneurship

 

Kudla had worked in a variety of fields, including modeling, finance, and accounting. However, his true passions revolved around sports and the outdoors. He moved to Encinitas at the age of 18 and was inspired by the active lifestyle of his community.

The initial spark of motivation to launch a clothing brand came after Kudla started practicing yoga & spending more time in the gym. He noticed that people in Encinitas didn’t dress as you’d expect for a workout, with basic board shorts being one of the most common choices.

Board shorts aren’t exactly an ideal choice for working out. Joe realized the market could use comfortable, stylish activewear made with high-end, sustainable materials.

He wanted to create a brand that would embody that laidback, yet active spirit of his hometown. Sustainability and ethical production were also very important features. He just needed to come up with a name and some money to get his idea off the ground.

 

Launching Vuori with Help From Friends and Family

 

Kudla knew that he needed a unique, memorable name for his brand. He settled on Vuori, which means “mountain” in Finnish. The name symbolizes the brand’s high standards and the company’s goal to reach the highest level of both product quality and environmental sustainability.

As for funding, Kudla relied on support from family and friends, raising about $2,000,000 to launch his company. By 2015, Vuori had released its first pair of shorts. For the first two years, Vuori focused solely on men’s activewear.

Unlike most of the big brand athletic attire, Vuori clothing was simple and stripped of the embellishments that you expect on a pair of Nike or Adidas shorts. The simplicity of the designs has an effortless look that perfectly reflects Kudla’s adopted hometown region.

The company also sold exclusively to retailers, fitness chains, and yoga studios. Vuori had immediately carved a niche, as the only men’s line of athletic-leisure wear in a market dominated by brands aimed at women.

However, the company was also running out of money by this time. Kudla and his team needed to shift gears quickly if they wanted to avoid having Vuori become another failed business.

 

Pivoting to Direct-to-Consumer Marketing

 

Vuori was certainly selling clothes, but was at risk of running out of funds, leading Joe to adopt a new strategy. He decided to focus the company’s attention on the direct-to-consumer (DTC) market.

The company started selling clothing directly to consumers through its website. Vuori relied on paid advertising & social media platforms to generate interest and grow the brand. Focusing more on the DTC market was integral to the success of Vuori. In a profile story of Kudla, he mentions spending $20,000 per month on digital advertising early on.

The DTC strategy worked. It got more clothes into the hands of consumers, helping to spread the word therefore gaining more customers.

 

Partnering with Retailers and Opening Stores

 

After selling clothes independently, Vuori started gaining enough attention to attract interest from several major retailers. The company had joined an incubation program that got the clothes into over 150 physical locations through a partnership with Nordstrom.

This led other retailers to consider selling Vuori clothing. By 2018, Vuori was available in more than 600 stores around the country.

Norwest Venture Partners invested $45 million in the company in 2019, leading to a $200-million valuation of the company. In 2021, the company experienced significant growth, tripling its revenue from the previous year. Vuori was on the rise, leading to more store openings and more employees.

The growth of Vuori brought more outside investment. In October 2021, Softbank led a group of investors in putting another $400 million into the company.

The latest investments brought the company’s valuation to $4 billion. Despite the investments from outside sources, Kudla remains the majority owner and CEO.

 

How Does Vuori Stack Up to the Competition?

 

With a valuation of $4 billion, Vuori is a major company. However, it’s not quite generating as much revenue as the biggest brands.

Outdoor Voices, a sportswear brand focused on fashion, and a close competitor to Vuori and Lululemon, generated close to $90 million in sales in 2023. Vuori also generated less than $100 million that year.

For comparison, Lululemon had worldwide sales of more than $8 billion in 2023. Some serious cash they are racking in. Yet, there’s plenty of room for smaller companies to carve out a space for themselves. Experts predict that the market will reach $150 billion globally by the end of 2025.

 

Standing Out From Other Brands in the Same Market

 

Kudla carefully built Vuori into a massive player in the activewear market, starting with a small selection of products and expanding to continually meet the needs of customers.

Vuori started with high-end yoga clothes made for men. However, market research revealed that customers were interested in more than just yoga, leading them to expand their product line to cover other areas of athleisure wear.

Vuori now has a wide range of clothing for both men & women. You can shop shorts, hoodies, polo shirts, socks, vests, tank tops, bags, hats, and even board shorts. Along with a growing selection of products, Vuori stands out for providing a unique blend of performance, style, and sustainability. You also can easily transition from working out to social settings while wearing Vuori.

Sustainability is also a big focus of their brand identity. The company is committed to reducing its environmental impact using sustainable materials, such as recycled polyester and organic cotton. They also implement ethical manufacturing practices.

Community engagement and wellness initiatives are also important aspects of their success. Offering free yoga classes in certain areas, along with offering access to other programs. They aim to foster a sense of community and promote a healthy, active lifestyle.

These features helped Vuori succeed, whereas many others have failed. However, they are still just one of many companies hoping to capture a portion of the activewear industry. Only time will tell whether Vuori can continue to grow.

 

From a Few People in a Garage to Over 1500 Employees

 

When Kudla started Vuori in Encinitas, California, he had a team of just a few people. They sold clothes out of a garage. Fast forward a decade, the company now has 1,500 employees. Vuori is at the top of the list of fastest-growing brands for consumers.

The success of the company’s DTC plan allowed Kudla and his team to stop selling clothes out of a garage. Vuori now has over 32 stores in the United States and another in London.

The company plans to open a couple dozen more stores by the end of 2024. Some of the locations include China, Japan, and Korea. By the end of 2026, Joe hopes to have over 100 stores in the US alone. This could be a sign that Vuori is here to stay, as opening more physical retail stores is a sign of confidence in the company’s growth.

The same can’t be said for one of Vuori’s biggest competitors. Outdoor Voices, which started about the same time, generates comparable revenue, and offers similar styles, announced that it is closing all its stores. Outdoor Voices is planning to go online only. Some employees claim that the company is planning for bankruptcy.

Along with opening more stores, Vuori plans on offering even more clothing options soon. They now have items for fitness, lounging around the house, travel, daily commutes, swimming, and the outdoors. Vuori is very much now a global athleisure brand, and since that retail sector continues to skyrocket- it’s not a bad title to have. Experts predict that the market will reach $150 billion globally by the end of 2025.

 

Where Does Vuori Go From Here?

 

The future of Vuori is likely to include even more stores, products, sustainability, innovation, and digital growth.

Vuori has been strategically expanding its retail presence, both domestically and internationally. This includes opening new brick-and-mortar stores in key markets, which should help increase the brand’s visibility and help connect with customers on a truly personal level.

Production innovation is another important focus for the future of Vuori. The company may continue to explore new materials and technologies for enhancing the performance and environmental friendliness of its products. Expect to see an expansion of their product line. This should allow them to really cater to a wider range of sports and outdoor activities.

More stores and products are just the start for Vuori. There’s also talk of Vuori launching an initial public offering (IPO). With around $100 million in sales, it’s one of the top brands in sportswear. In fact, they may file for an IPO as early as summer 2024.

Sustainability is also a key part of the company’s mission, which is likely to remain a focus. Future initiatives are likely to help further reduce the environmental impact of their supply chain and increase the use of recycled and sustainable materials.

This is an area where some of the biggest brands are falling behind. For example, Lululemon is known to use materials that have a large carbon footprint, such as nylon and polyester. Vuori on the other hand uses recycled materials as much as possible.

 

Creating a Niche in Retail Continues to Pay Off

 

In the end, Vuori is another great business success story that showcases the importance of finding a gap in the market and filling it with a great product. Vuori is a distinct activewear brand that has quickly carved a niche for itself in the highly competitive apparel market. Their commitment to sustainability and producing high-quality clothing has helped it grow rapidly.

The company started in 2015, drawing inspiration from the active, outdoor lifestyle that’s synonymous with its Southern California roots. The brand soon started selling clothes at yoga studios and gyms before pivoting to selling online and at physical stores.

Their line of clothing offers versatile activewear that seamlessly transitions from workout sessions to casual social settings. They embody a casual, yet functional aesthetic.

Vuori remains on a path of rapid expansion, thanks to the leadership and vision of Joe Kudla. The company’s founder and CEO has not signaled any intention of selling his company or handing over the reins, which means Vuori is a brand to keep an eye on. Lululemon has at least one upstart brand to potentially worry about in the coming years.