Gap to Gear up a Athleta for Growth

Retailer Gap Just Stepped Up Its Direct Presence. The apparel giant in September bought sports apparel cataloger Athleta from Blue Highways Holdings for about $150 million in cash. Athleta’s CEO Joe Teno will become president of the brand.

Founded in 1997, Athleta sells clothes for yoga, running, skiing and surfing via its Website and catalog. The company has grown from about $20 million to $75 million, according to Bruce Willard, founder/manager of Blue Highways Holdings, which held majority interest in the company.

Willard was the founder/CEO/owner of The Territory Ahead, which he sold to Cornerstone Brands in 1999. “We got to a point after I invested and purchased [Athleta] three years ago that it was time to see what we can do” in terms of selling the company, he says.

Athleta had grown tremendously and become “nicely profitable,” as a catalog and Internet business, Willard notes, but “at some point, it makes sense for retail. And we wanted to find someone who can leverage retail sources, because that’s not been our interest or our experience.”

Enter Gap. Athleta will become the fifth brand in Gap’s online portfolio, which includes its namesake brand, Old Navy, Banana Republic and online shoe retailer Piperlime. Gap spokesperson Louise Callagy says the deal is a “strategic acquisition that creates new opportunities to expand customer reach and growth for both brands.”

Not that Gap is in any hurry to open Athleta stores, Callagy adds. “Our immediate focus is on integrating Athleta into our online division Gap Direct. Of course, we will consider other growth opportunities in the future.”

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