An worker rings up a buyer’s purchases on the Athleta retailer in New York.
Ron Antonelli | Bloomberg | Getty Photographs
Hole introduced plans Tuesday to promote its Athleta model in Canada, rival Lululemon’s house turf.
It marks the ladies’s athletic attire model’s first growth outdoors the USA. Hole stated Athleta will launch on-line within the Canadian market this summer time, adopted by the autumn opening of company-owned retail shops in North York, Ontario, and West Vancouver, British Columbia.
The transfer is a part of Hole’s general technique to develop Athleta to the purpose that it is bringing in $2 billion in web gross sales yearly by 2023. Athleta surpassed the $1 billion mark final 12 months, with its gross sales up 16% from 2019 ranges. Hole’s complete gross sales for 2020 amounted to $13.8 billion.
“Worldwide growth is a key part of our progress technique,” Athleta CEO and President Mary Beth Laughton stated in a press release.
The Athleta model — like Lululemon and Nike — has been a pandemic beneficiary, as extra ladies search for comfy clothes akin to leggings, stretchy pants, tank tops and smooth pullover sweaters to put on at house throughout the well being disaster. For Hole, the Athleta banner offers a pocket of progress, as its namesake Hole model and Banana Republic have struggled to resonate with customers.
Hole is on observe to open 20 to 30 Athleta shops throughout North America annually, including to the greater than 200 places it has right this moment. It additionally stated it should contemplate totally different wholesale partnerships and franchise-operated shops because it appears to be like for progress globally. It already has a franchise mannequin and wholesale enterprise for Athleta within the U.Okay.
In Hole’s fourth quarter, Athleta’s same-store gross sales have been up 26% from a 12 months earlier, marking the largest enhance of its 4 manufacturers, together with Outdated Navy. Athleta can be the least promotional of Hole’s manufacturers, which helps drive earnings increased.
Hole might face hurdles because it takes Athleta into Canada. Different U.S. retailers have stumbled within the nation previously. Goal shuttered all of its Canadian shops lower than two years after opening them. Greatest Purchase has additionally closed a lot of its shops within the nation.
Lululemon’s success there offers Athleta with promise. Lululemon was based by Chip Wilson in Vancouver in 1998. The model began as a yoga studio, then grew to become a stand-alone retailer in 2000. The important thing for Athleta will likely be to find out if there’s sufficient market share for it, too.
Hole shares are up greater than 60% 12 months up to now, as of Monday’s market shut. The corporate has a market cap of $12.2 billion.
—CNBC’s Courtney Reagan contributed to this report.
WATCH LIVE: Athleta CEO Mary Beth Laughton will be part of CNBC’s “Energy Lunch” Tuesday afternoon to debate the model’s announcement.