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Digitally Native Vuori Lands Equity Growth Dollars. Here’s Why That Matters.

Vuori’s new growth equity investment indicates the continued market strength and potential for digitally native, high-growth brands, even as investor skittishness amid trade-war tensions roil the stocks of traditional retailers.

The California-based active lifestyle apparel brand founded by Joe Kudla says it’s profitable, and its rocket-ship trajectory since launch four years ago nabbed the attention of Norwest Venture Partners, which counts Topo Athletic, Birdies and Kendra among its portfolio of direct-to-consumer and omnichannel companies.

“As devoted customers, it was apparent to us that Vuori had built versatile products with tremendous energy and soul,” said Jon Kossow, a Norwest managing partner who will occupy a seat on Vuori’s board. “This is exactly the type of positive brand experience we search for in our consumer investments, and we look forward to supporting Joe and the team as they continue to bring new products to market and delight their customers.”

Vuori’s West-Coast-style-meets-technical-performance apparel resonates with a modern young consumer who increasingly prioritizes the #sweatlife but wants to invest in versatile clothing that fits the important criteria of “studio to street.” Originally just a men’s brand, Vuori later added the women’s category and now operates wholesale with partners including Nordstrom and REI, in addition to its own stores and e-commerce.

Vuori

“From our employees, to our retail partners, to the folks who drop by our stores just to say hello, starting this business has been a team effort since day one,” said Kudla, who also serves as Vuori’s CEO. “We are thrilled that our team is further expanding to include Norwest, and look forward to what our partnership will bring.”

Vuori’s new funding comes as investments in digitally native and DTC brands show little sign of deceleration—even though fashion label founder Alex Faherty claims “no one wants to fund an apparel brand.Rockets of Awesome, for one, used part of its February raise to open a New York City pop-up offering customers a seamless back-to-school clothes shopping experience. And lingerie startup Lively is under new ownership after industry leader Wacoal paid $85 million for the fast-growing three-year-old underwear company that’s part of a new cohort giving Victoria’s Secret a run for its money.

Online sales in Q3 2018 accounted for 9.8 percent of all retail, or $131 billion, IAB detailed in its DTC disruptors report, and e-commerce shopping’s share of the total retail market has grown 2.5x over the past 10 years.

Sue Hogan, IAB’s SVP of research and measurement described how DTC brands are differentiating and thriving via “their respective supply chains” and “driving traditional brands to rapid innovation.”

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