Professional Documents
Culture Documents
next phase of growth and development through investing in 5 key areas such as
catalog circulation, MIS, private label development and so on. Athleta is already in
3 years of its operation and have been witnessing 150% of revenue growth year
on year. This article will try to access Athleta in terms of matrix canvas and at the
end would propose recommendation going forward.
Need Womens sports segment represents incredible growth rate, has huge
participant base and there are group of customers who are not satisfied with
traditional retailers. Customers would not mind in spending more on high quality
merchandise.
Solution Athleta has been in operation for the past 3 years and has enhanced
customer base dramatically and most of its customers are repeat customers. The
Athleta product line was sourced from private label Athleta essentials. The
company designed its own clothing line as customers requested the kind of line
and style that has not yet been created. They designed clothes in hard to find
sizes such as tall and petite. Athleta did not believed in reverse engineering or in
selling clothes at cheaper prices that is did not wanted to compromise integrity of
the brand.
Team Athleta comprises of stellar team. All the staff members are previous
athletes and knows about the business from inside out and they know what it
means to be a team player. Kerslake himself have been ardent sportsperson and
acts as a founders market, in fact everyone who works in Athleta has been a
sportsperson himself or herself. The customer service staff were carefully
selected. They were trained to bridge the gap between customers needs and
solution. It did not set sales goals so that sales staff could focus on finding the
best product for each customer.
Market In 1999, It was known that 21.2 M women participated in sports and of
that 50% participation was in most popular sports. In 2001, 58% of healthcare
club memberships were used or taken by women. Further, women spent around
$25 B on sport apparel and broader market for women exceeded $96 B. So, the
market was there and growth was imminent.
Network Although not everyone brings the experience of startup company but
Teams reputation is relevant to the overall success of Athleta so far. Athleta has
been able to raise 4 rounds of funding and thus represent decent level of access
to investors, although the company fall short of its $2.1 M series B funding.
Selling Athleta drove its 70% of revenue from direct mail catalogs and 30%
revenue from website. Many investors were concerned due to cannibalize nature
of the various channels but Athleta believed that offering consumers wide variety
of choices fostered stronger customer relationships. Need
10
Managing 8 Solution
supplier terms (in order to reduce COGS by 2%), increase Selling Market
catalog circulation (to expand to 20 M more customers)
and team expansion (so that grass-roots market could be Network Competition
Managing Athleta believes that the professional life values should not be
different from that of personal lifes. The HQ was build close to preserve so that
employees could easily go running or cycling during breaks. This led to lower than
average industry turnover rate, and attracted top talent.
Overall, Athleta company looks strong in terms of Matrix Canvas. Nonetheless, just
3 months of cash left in the account, Athleta is looking desperate to find cash and
to start next phase of its growth. Below mentioned 3 options are briefly described
and accessed
Based on this article analysis from matrix canvas to assessing DCF model, it is
promising that Athleta is here to stay and would play a dominant role in future. It
will be though rely on how and to what extent Athleta be successful in raising
capital and implementing on the development goals it has set for coming years.
Athleta is ready to give large stake of the company and accept onerous term
sheet
Want to preserve unique culture of the company
Competition
There are 4 categories of retailers that sold womens athletic gear
Tier 1 Women-specific sports retailer exclusively on the womens market
Tier 2 Specialty sports good retailers conc on the particular market mid & high
end products and offering customers with high level of expertise
Tier 3 Big box retailers carrying very broad and deep product selections
Tier 4 Dept stores carrying a narrow range of sports related products (Macys)
Channel Strategy derived 70% of revenue from direct mail catalogs and 30%
revenue from website. Many were concerned due to cannibalize nature of the
other channels, Athleta believed that offering consumers wide variety of choices
fostered stronger customer relationships
Product
The Athleta product line was sourced from private label Athleta essentials. The
company designed its own clothing line as customers requested the kind of line
and style that has not yet being created. They designed clothes in hard to find
sizes such as tall and petite. Athleta did not believed in reverse engineering and
selling clothes at cheaper prices. Did not wanted to compromise integrity of the
brand.
Customer
Women between age 18-50 with a college education and income greater than $
80K. Physically active and committed to engaging in regular exercise and always
seeking alternatives to traditional outlets. They bought high quality merchandise
even though they spend more.
Customers want to shop in an environment which is well-organized and had
knowledgeable staff members.
Brand
Athleta also tried to educate its customers during ales process. The customer
service staff were carefully selected. They were trained to bridge the gap between
customers needs and solution to those needs. It did not set sales goals so that
sales staff could focus on finding the best product for each customer.
Culture
The professional life would not be different from a personal life. The HQ was build
close to preserve so that employees could easily go running or cycling during
breaks. This led to lower than average turnover rate and attracted top talent.
Ci
In 1998, Kerslake founded athleta as a womens sports company selling wide
range of womens athletic gear through mail order and online.
With the growth of 150% per year, Athleta would soon reach the revenue of $26 M
in 2002
Athleta founder had a conservative approach in securing companys culture,
running under constrained capital structure and building vision.
Athleta has come to a point of launching a multi-channel approach for reaching
out to customers and selling its product
Athleta have fulfilled 400K orders and acquired 231K customers that too with $5 M
equity capital.
The success was based on the dedicated amateur and professional athletes.