By Abigail Summerville and Echo Wang
(Reuters) – Alo Yoga’s parent company is exploring a possible investment that could value the U.S. maker of celebrity-worn workout clothes at about $10 billion, people familiar with the matter say.
The deal deliberations come as the privately held company makes progress in poaching young consumers from larger brands like Lululemon Athletica (NASDAQ:) and Nike (NYSE:), often thanks to clever marketing using internet influencers.
According to the sources, Alo Yoga founders Danny Harris and Marco DeGeorge have hired investment bank Moelis (NYSE:) to advise on options that include selling a stake in the company.
The potential investors, which include private equity firms and sovereign wealth funds, have discussed structuring a deal to give them preferential returns or debt-like protection, the sources added.
No transaction structure has been agreed and it is possible that Alo Yoga decides against a deal, said the sources, who requested anonymity because the matter is confidential.
Spokespeople for Alo Yoga and Moelis declined to comment.
Alo, an acronym for air, land and ocean, is often worn by celebrities such as Taylor Swift, Katie Holmes, Hailey Bieber and Kendall Jenner and can be seen in paparazzi photos.
The company was founded in 2007 and has more than 50 stores in the United States and several international locations. Many locations have yoga studios that offer a variety of classes.
The company’s best-sellers include leggings for $128 and sweatshirts for $108. Alo has also expanded into footwear, beauty and wellness categories.
Alo Yoga is part of Harris and DeGeorge’s Color Image Apparel company, which also includes the Bella+Canvas brand. Bella+Canvas makes blank T-shirts and other apparel for wholesalers.
Los Angeles-based Color Image generated more than $1 billion in revenue in 2022 and the company doubled in size from 2021 to 2022, Harris, who is also Alo’s CEO, told the Wall Street Journal in May .
Transactions in the athleisure sector are increasing. Activewear brand Vuori Inc is planning an initial public offering as early as next year after securing investment from SoftBank (TYO:) Group Corp in 2021 at a valuation of $4 billion.
Kim Kardashian’s underwear brand Skims, which sells activewear and loungewear, also received around $4 billion in funding this year.
Source : www.investing.com