In this episode of Money Rehab with Nicole Lapin, Sammi Cohen examines the rise and fall of activewear brand Outdoor Voices. The discussion covers how founder Ty Haney identified a gap in the athletic wear market, targeting millennial women seeking casual activewear for daily activities, and how the company's "doing things" ethos resonated with social media trends.
The conversation then explores the company's financial troubles, including excessive spending on non-essential items and leadership conflicts. Cohen details how tensions between Haney and retail executive Mickey Drexler led to Haney's departure in 2020, followed by a sharp decline in company valuation from $110 million to $40 million, ultimately ending in the company's acquisition by Consortium Brand Partners in 2024.
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In 2014, Ty Haney, a 24-year-old Parsons School of Design graduate, launched Outdoor Voices after identifying a gap in the athletic wear market. While established brands focused on performance wear, Nicole Lapin notes that Haney recognized an untapped market for casual activewear suited to everyday activities.
The brand specifically targeted millennial women seeking comfortable athletic clothing for daily wear, not just intense workouts. Sammi Cohen explains that Outdoor Voices' "doing things" ethos aligned perfectly with casual lifestyle trends on social media, such as the "hot girl walk." This successful branding strategy, combined with their inclusive approach to physical activity, led to the opening of 16 stores.
Despite its apparent success, Sammi Cohen reveals that Outdoor Voices struggled with profitability due to excessive spending that didn't drive sales, including $45,000 on fresh flowers and $36,000 on sparkling water. The situation worsened when veteran retail executive Mickey Drexler joined the company, leading to strategic clashes with Haney. Drexler's focus on business fundamentals conflicted with Haney's community-oriented approach, ultimately contributing to Haney's departure in 2020.
Following Haney's exit, Outdoor Voices faced significant challenges. The company's valuation dropped dramatically from $110 million in 2018 to $40 million in early 2020. Despite attempts to stabilize under various leaders, including Cliff Moskowitz and Ashley Merrill, the company continued to struggle. In March 2024, Outdoor Voices closed all its stores, and by June 2024, Consortium Brand Partners acquired the company.
1-Page Summary
The founding story of Outdoor Voices is one of recognizing a gap in a well-established market and successfully filling that niche with a unique product and message that resonates with a specific demographic.
At just 24 years old, Ty Haney, a graduate of the Parsons School of Design and Boulder, Colorado native, launched Outdoor Voices. Haney identified a significant gap in the athletic wear sector, which legacy brands had saturated by focusing primarily on performance activewear. There was, however, a lack of brands addressing those who sought an activewear suited to a more laid-back, everyday experience.
Nicole Lapin emphasized Haney's keen observation of the white space in the market for casual activewear—apparel that people could wear for a leisurely day of activity or simply for comfort without the pressure of high-performance athletics.
Haney's vision was to create athletic wear tailored for individuals who prefer clothing suitable for recreational activities and errands. This approach specifically targeted young millennial women who desired to sport athletic clothes in a casual context, not strictly for intense workouts.
The early success of Outdoor Voices owes much to aligning with the preferences of millennial women who emphasize comfort and ease in their daily lives. This demographic quickly embraced the brand, captivated by its unique positioning in the activewear market.
Sammi Cohen pointed out that Outdoor Voices' "doing things" ethos matched perfectly with the casual lifestyle trends pervasive in social media, such as the "h ...
The Founding and Early Success of Outdoor Voices
Outdoor Voices, a company that appeared successful from the outside, faced an internal financial downfall due to a misalignment of expenses and sales growth, as well as leadership clashes that continued through to the exit of its founder.
Sammi Cohen disclosed that despite rapid expansion and the outward growth of Outdoor Voices, the company was unprofitable. The company incurred frivolous expenses, such as spending $45,000 on fresh flowers and $36,000 on Topo Chico sparkling water, which failed to contribute to an increase in sales. This spending did not produce a return on investment, indicating a disconnect between the company's outlays and its sales performance. This became characteristic of the company, resulting in financial instability as it committed to long-term leases for newly expanded stores while spending excessively. The interviewee suggests a need for a focus on slower, more profitable growth and maintaining a strong customer connection, something that Outdoor Voices initially did well.
Mickey Drexler, a veteran retail executive known for his tenure at J. Crew and Gap, was brought into the company to leverage his extensive legacy retail experience. His focus on business fundamentals, such as profit margins and unit economics, was crucial for achieving profitability and contrasted sharply with founder Ty Haney’s community and social me ...
Leadership Turmoil Led To Company's Downfall
After founder Tyler Haney stepped down, athletic apparel company Outdoor Voices faced significant challenges trying to stabilize its operations with new leadership.
Following Haney's departure, Outdoor Voices experienced a substantial reduction in its company valuation. In 2018, the company was valued at $110 million; however, by early 2020, during a funding round, the valuation plummeted to $40 million. This financial setback was discussed in relation to the company's struggles to maintain its market position amidst leadership changes.
In March 2024, Outdoor Voices made the drastic move to close all of its store locations, which stirred up uncertainty regarding the company’s future trajectory. Not long after, in June 2024, Consortium Brand Partners stepped in to acquire Outdoor Voices. This acquisition occurred amidst a background of rapid leadership changes within the company, with a "revolving door" of different leaders trying to steer Outdoor Voices in a new direction after Haney's exit.
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Financial Troubles and Acquisition of Outdoor Voices
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