Activewear retailer Rhone Apparel grows 500% in 2015
January 13, 2016 12:21 PM
For Rhone Apparel to shine in a market that includes retail giants such as Nike Inc., adidas America Inc. and Under Armour Inc., the men’s athletic apparel company needs to get as much exposure to customers as possible, CEO and co-founder Nate Checketts says. To achieve visibility, the retailer shifted from exclusively selling online when it launched more than two years ago to offering products in more than 120 retail storefronts in 2015.
Rhone Apparel’s new wholesale business is the primary driver of the company’s 500% growth in 2015, Checketts says. The retailer launched in November 2013 selling only through its website, Rhone.com, but in November 2014 partnered with Bloomingdale’s to sell in five locations. In 2015, Rhone expanded its retail footprint to 127 stores, selling at such retailers as Nordstrom and Core Power Yoga. Still, e-commerce accounted for 65% of Rhone’s total sales last year.
“Many Internet retailers believe you need either an e-commerce strategy or a wholesale strategy. For us, it’s just reaching consumers the best way possible,” Checketts says. The hope is that customers will see Rhone products in store and later search for them online, he says.
Checketts and his co-founders launched Rhone because they saw a lack of high-quality activewear for men, he says. Rhone’s products, which include high-end athletic shirts, bottoms and accessories, differ from standard apparel in the industry through its fabrics and technology. Silver is incorporated in the threading of Rhone’s garments, for example, as the metal is known for antibacterial and antimicrobial traits that can help fight sweat stains and odors, the company says. Other technology includes mesh panels in sweat-prone areas and stitching that reduces chafing.
The holiday season added to Rhone’s 2015 success, as the weeks leading up to Christmas grew sales 500% over the same period last year, Checketts says. The retailer shifted its holiday strategy from previous years and offered 12 weeks of deals throughout the holiday season, rather than one big discount on Black Friday or Cyber Monday, for example.
“On Black Friday, there is a panic-ridden obsession from customers to get the latest steal. Instead of pulling customers too far forward, we thought, ‘let’s get them interested and keep them interested,’” Checketts says.
The company says its 350% increase in traffic can be attributed, in part, to changes Rhone made to its website in 2015. One change in particular was eliminating shifting hero shots at the top of the page and replacing them with a banner image that changes daily. “Homepage sliders have been done and customers were remembering nothing from them,” Checketts says.
The retailer added an online journal to its website in the fall to keep customers engaged. “If you’re a very active buyer, why else would you be thinking about us? This is a way to provide a value-add through content,” Checketts says. Rhone posts 2-3 articles per week, and the content can range from nutritional tips to workouts.
Rhone has raised $6.2 million since its launch, including $5 million in series A funding in June. Checketts says the company doesn’t break out online sales numbers, but April 2015 the company said it projects more than $3 million in sales for the year.
Despite Rhone’s massive growth, it must compete with big, established brands that also have surging web sales. Nike Inc., No. 62 in the Internet Retailer 2015 Top 500 Guide, said in a December earnings calls that web sales grew 50% in the second quarter of fiscal 2016. During the quarter, Nike launched localized e-commerce sites in Canada, Switzerland and Norway, and plans to launch additional websites in Mexico, Turkey and Chile in the next three months. In October, executive said they plan to grow web sales 600% by fiscal 2020 to $7 billion from the current $1 billion. Additionally, Adidas America Inc., No. 246, said in an August earnings call that web sales were up 57% during the first six months of 2015.
Under Armour Inc. is ranked No. 121 in the Internet Retailer Top 500 Guide and Nordstrom Inc. is ranked No. 19.