Growing Athleta women's catalog fills niche

Scott Kerslake was an athletic San Francisco area resident when he began to hear from active women friends about the lack of apparel and gear made for them that really fit well and filled their needs. The next steps came from a man with business savvy: He left his job at Sapient Corp. and, in 1998, founded Athleta, a catalog company specializing in women's active apparel and gear.
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Scott Kerslake was an athletic San Francisco area resident when he began to hear from active women friends about the lack of apparel and gear made for them that really fit well and filled their needs. "This is ludicrous," he recalled thinking, especially since a bit of research showed the women's category was the fastest-growing segment

The next steps came from a man with business savvy: He left his job at Sapient Corp. and, in 1998, founded Athleta, a catalog company specializing in women's performance-oriented apparel, footwear and gear.

"The disconnect was so huge to me," Kerslake told SNEWS recently. "I thought, 'Why isn't anybody doing this?'"

The first catalog was 24 pages, had a circulation of 85,000 and already included five Athleta-brand styles since going private label was one of his strategies. Sales the first year were $1.5 million. Today's catalogs go to some 2 million customers and prospects. Private label? About 40 percent. Sales ring in at more than $23 million. Average order size is $130 to $190, depending on the season.

The momentum was carried a huge step further a few months ago when the company nabbed $6 million in funding in late 2002 -- "a huge deal," he said -- and became profitable. So far, however, it remains an independent and private company, with success based on "kick-ass service and amazing products," Kerslake added without blinking.

Housed in bustling offices in an R&D park in Petaluma, Calif., north of San Francisco across the Golden Gate Bridge, Athleta (www.athleta.com) has slowly expanded, occupying more and more of the center's space, with a new 16,000-square-foot warehouse across the street from the main office being claimed this spring.

Kerslake, who retains the titles of president and CEO, has also hired those from larger companies who have the experience to take Athleta to the next level. To wit, former TravelSmith vice president and L.L. Bean director Joe Teno came on board about two years ago as senior vice president of operations, and Ron Campo also came from an L.L. Bean background to oversee organization of the merchandising department.

"My philosophy is, hire amazing people and get out of their way to do their thing," said Kerslake, who still maintains enough of a tie to employees that he is sometimes found tossing on his gear (no Athleta gear for him, though!) and going out for noon runs with others there.

Although a quickly growing company that carries names such as Hind, Marmot, adidas, Patagonia, Sugoi, Prana, Merrell, Moving Comfort and Champion, its offices remain youthful if not chaotic and a bit cramped with dogs welcome at all times. Big dogs and small dogs lounge in aisles and wander at whim between cubicles looking for an ear scratch. Bikes are propped against walls. Grungy running shoes lie in cubicle corners waiting for a decision to head out for the hills. And if any employee decides to hit the road, she can check out some piece of Athleta gear to test so the company is personally knowledgeable about how stuff it carries wears and fits.

Athleta's private-label technical apparel, with an equal emphasis on performance and style, is still a growing area for the company, and Kerslake says it has an eye on someday opening a brick-and-mortar store -- not right away but perhaps in 18 months or soon thereafter -- that would be a "performance boutique," a "brand shrine," and a center for activity such as a meeting place for clubs, workshops and workouts.

"People want to be part of something," he said. "They want to be part of something meaningful."

Kerslake still is an enthusiastic cyclist, runner, surfer and rugby player, among other things. And although his male friends initially thought he was "a little nuts," they've probably changed their minds.

SNEWS View: We remember the first catalog in mid-1998, dropping into our mailbox and causing us to flip through it and raise an eyebrow in interest. Athleta's come a long way since then with a range of its own gear and big plans for its future. The guts of the offices remind us a bit of the dot-com havens of lore -- dogs, games, workout clothing, a hectic and energetic frenzy. But this company isn't working on losses, and it has filled a niche in active women's needs that still has room. Although rumors have crossed our desk several times about which big-name company might be circling to pick off the fresh, young, Athleta, we don't think Kerslake is ready to give up the reins -- yet. He has a lot more building to do before he could walk away completely satisfied. We're looking forward to watching.

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