Athleta

These companies use the creative tools of capitalism—including the profit motive—to address society’s unmet needs.

CTW 2021-43-Athleta

When gymnastics superstar Simone Biles dropped out of competition at the Tokyo Olympics, citing her mental and physical health, she had a supporter in her corner: her sponsor Athleta, the women’s activewear brand with $340 million in sales in its most recent quarter. “We never hesitated about our continued support,” Athleta CEO Mary Beth Laughton tells Fortune. “It was so clear how we were going to support her as a brand.”  
 
That kind of empathy isn’t typical among sports sponsors. But it’s something that Athleta has cultivated since 2019, when the Gap Inc. brand entered the sponsorship arena by signing track star Allyson Felix. Since then, the label has redefined the athlete-sponsor relationship, working with athletes as “holistic people” rather than valuing only their championships. That approach has included helping Biles reach her fan base of young girls and working with Felix to provide $200,000 in childcare grants to Olympic and Paralympic athlete moms. 
 
Athleta has also opened up a new kind of opportunity for female athletes, often given short shrift compared with the deals on the table for male competitors. (Both Biles and Felix left contracts with Nike before coming to Gap Inc.) Indeed, the brand decided to sponsor its first two athletes after identifying a gap between rising viewership of women’s sports and lagging corporate support.  
 
The strategy appears to be paying off. Athleta’s brand awareness was up six points this year, and first-quarter sales were up 56% compared with those in 2019.

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Allyson Felix, Olympic Gold Medalist, Track and Field, and Cofounder, Saysh 
Mary Beth Laughton, President and CEO, Athleta 
Interviewer: Emma Hinchliffe, FORTUNE


MPW Next Gen 2022 - Chasing Equity

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Allyson Felix, Olympic Gold Medalist, Track and Field, and Cofounder, Saysh 
Mary Beth Laughton, President and CEO, Athleta 
Emma Hinchliffe, FORTUNE


MPW Next Gen 2022 - Chasing Equity


Alison mary Beth thank you so much for joining us. Thanks for having us. Yeah. So Alison you recently retired from professional track and field, but not before coming back for one last race. Congratulations and congratulations on an incredible career. How are you feeling? Thank you. Um I feel really good. I feel like it hasn't fully set in yet. It's been a couple of months now, but I'm still, you know, still soaking it all up and I'm really excited for for what's next? Yeah. And you know, on that note, it's been about three years since you first signed with Athleta in that time you've released five collections with the brand. I think you're both wearing some athletic collection. Yes. Um you know, through that time, what have you learned about yourself about athletes? About athletes, sponsorships, About your fans? Oh my gosh, It's been such an incredible process. I mean, just being partnered with Athleta, I've been able to see how they do business and a business that's female lead. And um I've had a true seat at the table and I think more than anything, I've been empowered and I think that's a very rare thing to have happened. Um I have, I always say like there, I feel like they're like my big sister, you know, they have really just helped me grow in so many different ways and I've seen just a different way to do sponsorship. You know, they really support me holistically, you know, as an athlete, as a mother um as an activist and really to genuinely feel that and feel the support is something I've I've never had before. Yeah, let's talk about that a little more mary beth you started this partnership with Allison and you really approached the idea of athlete sponsorship in a way that most sponsors or any sponsors had not before. Um you know, how did you decide on that strategy and what were the differences that you really wanted to have and what your partnership with Allison would look like and the partnerships that followed? Yeah. You know, as Alison said, we definitely set out to flip the on the traditional sponsorship from the beginning and I think, you know, honestly it started with just who we partner with and you know else and obviously an amazing athlete, but so much more and really wanting to partner with, you know, people that really share our values and share, you know, the passion for our mission which is to ignite the limitless potential of women and girls and I think that comes so naturally to Alison and so, you know, even just how we choose partnership is different, but then, you know, how we approach the partnership I think is the real difference and to what Allison saying, you know, unlike maybe a traditional sponsorship where, you know, we're paying a partner to wear our clothes like this is so much more, it's about how do we create value together, like through the lens of our values and so, you know, we do um approach it in the way of like how do we support Alison of course as an athlete. Um but also as a mother of her daughter cami um as an entrepreneur with her new um um you know, business as an activist, you know, really around female athlete um rights and and just how do we partner with her in that holistic way? And I think there's been so many fun examples right through the years that we've been able to do together. I was just thinking of one that was more recent this summer where um we joined forces is you know, Allison Athleta and then and mother right the nonprofit and it was so cool because you know, we got to to offer free childcare at the USa track and field championships and that's something you're passionate about told us about and then we're able to help support that. And I think it's like supporting your passions is something we just get so much out of our customer gets so much out of, you know, it just feels so meaningful. And then I think it's it's things like just simple things like the contract, right? Like supporting you as a mother of of course you can bring Kemy with you on a travel, you know whenever you travel with us or you know, if you're pregnant, nothing changes in the contract, things like that that I think are meaningful. Um and just different than maybe how more traditional sponsorships have been set up. Yeah, there's a lot of points in there for us to circle back to. But first I want to ask you about how this strategy and this partnership approach has paid off for you in terms of sales and financial performance for Athleta. I mean it's no secret gap inc has struggled over the past year, but Athleta has often been seen as a bright spot within the company. You know, you're on track for about I think two billion in sales in 2024. So what role has elements like this partnership with Allison played in that? Yeah. You know, it can't come on like the exact specific sales, but I will say that it's been such an energy point for our brand. And I think the reason that it's um really been able to drive that is because people love Allison. They love the association with Athletic. I think they get it. That's why we're aligned makes so much sense. And I think they also love it because and Alison can talk to this, but she has a real seat at the table, right? Like designing the clothes, like everything we make really has her touch on it and I think the customer wants to support her and support um what athlete is doing and what we're doing together. And so it really has driven a lot of energy new customers. Um it's really been fun. Yeah. You know, Alison, as I mentioned on stage before we got up here, obviously your origin story in terms of how you came to this partnership with Athleta was about how your sponsorship deal with Nike ended and how you were treated during your pregnancy as you recovered from taking time off and even coming through a traumatic birth experience. You know, now that you've had more time to process that experience now that you're kind of have your official days on the, on the track behind you. You know, is there anything else you talked about it a lot? But you know, is there anything else you want to say to the decision makers at Nike who allowed that situation to happen? I think more than anything, I reflect on that time and I think about you know what a hardship it was and um kind of what a dark time in my life was at that point, but I think about the individuals that we were interacting with and they were all men and I think that if a woman was at the table we probably wouldn't have had the same outcome. And so I think, you know, it's not Nike this is an issue, you know, for so many different aspects of business is truly having a diverse group of individuals and a diverse um diverse thoughts and being able to support in so many different, so many different ways and I think that's truly the difference. Yeah. Um I'll come to the audience for questions in a moment if you have anything start thinking, but um, you know, through this new kind of partnership approach, what value do you think that brands that have not kind of taken this approach have missed out on? You know, sponsors like Nike have often been very focused on athletic performance and metrics and races and that sort of thing. Whereas it sounds like Athleta is really thinking about Allison and Simone biles is one of your partners as well. And the value they bring outside of their work in athletics as role models, as figures in broader culture, you know, what value have others missed out on? Yeah, I mean, to me, I feel like it's just the broader impact that we can have together, right. And, you know, rather than just the transaction of selling clothes, it's so much more than that. And I do think um the value we've been able to create, whether it's through the child care grants or through a lot of other, you know, things we've partnered on that actually impacts women and girls, you know, broadly in a huge way and, and athletes and women of all ages. And I think that is, you know, just missing out on that impact is probably what's happening because it's just so much broader than just selling the apparel. Yeah. Alison, what about you? What did Nike miss out on when they were paying attention to these other parts of your life. I think exactly as he said, you know, it's about so much more than just the performance, you know, and I think for a lot of athletes that is the focus obviously, you know, you want to have these amazing perf performances but there's all of these beautiful stories as well and they're powerful and they have impact and I think that, you know, as we think about success a lot of times it is, you know, just the pure dollars of it all, but what I love what's happening here with this partnership is that we're focused on impact, we're focused on change and um that's something that doesn't always come through on paper but we're seeing the effects of it. I mean when I think about what we've done in childcare and um talking to the athletes and the women who now they have an option to have a family while they're still competing and that's something I never really for myself, I always felt like I had to push it off till later and so now to see the younger athletes um having families being celebrated, it's just it's a whole new level and so um I think that's the value and that's what's really special. Yeah. Do you have any questions from the room for Allison or mary Beth Oh, I think we have one in the back so please go ahead and please introduce yourself. Hi, my name is Claire Bresnahan English, I am ceo of a nonprofit called New Leaders Council and earlier we were in a session about corporate activism and the topic of courageous leadership came up. So I think first of all, just incredible um applause to Alison for you, putting yourself on the line for women athletes, but also making a stand about birthing people across this country. So thank you. And so my question is about to both you and mary Beth about how do we as leaders here put ourselves on the line? How do we create more opportunities to make sure that we are using our positions of privilege to make sure that we are passing on um that privilege to other folks beyond ourselves. Thank you. Great question. Um well when you were talking, just one thought came to my head and just about how this partnership started and so I I wrote a new york times op ed and um Athleta actually read the op ed and that's how this organically came into existence. And it just reminds me that you have to think outside of the box, you have to do things differently and being courageous enough and brave enough to do that. You know, Athleta had never sponsored uh an athlete, you know, on the professional level before. Um and for them to take that step to me is huge and it shows that the leadership is forward thinking and not just staying in in this box that we've been in for so long. Yeah, I think that totally resonates with me too, I think back to the beginning of it and just the idea that we could rewrite the playbook, you know, we didn't have to go by the playbook, and I think being willing to do that together has been really just empowering, I think to both of us there, to the organization um more broadly, and I do think that one of the reasons maybe it's worked so well is because we've stayed, you know, aligned, I think both of us to our values so clearly and what we stand for and just being authentic to that, and I think that shows in in how we've partnered, what we've partnered on, it's all felt very natural and very aligned to what we stand for in our values, and I think that's also been just really key to um having our voice heard in an authentic way, very bad one, um you know, trend in this space over the past year is the changing rules around college athletes and C double A rules and what they're allowed to do with brands. Are you taking a look at the college level? That's something you're interested in? Yeah. You know, we're always, we're always thinking about other opportunities, I think um you know, nothing specific right now, but I will say that I don't one thing that I don't think will change is just making sure whatever partnerships we do um really do align with our values, so, you know, I don't see us partnering with someone who doesn't support, you know, our core values of women's empowerment, inclusivity, sustainability, like those are things that are just so core to the brand and um the partners have to be an extension of that, you know, authentically. So I think that will be always the first criteria for us. Yeah, I think we might have had another question in the room, Okay, we can come back, you know, do you think we're at a tipping point? I mean there's been so much happening for women, for mothers in sports and in athletics, has anything changed our things about to change? I think that we're seeing a lot of change. I think we have a lot of momentum as well, I mean I just think back the last couple of years and just um the amount of stories being told around athletes who are mothers um I love to see that and I love yeah, I love that now my daughter is going to grow up with these incredible examples of women. Um Well obviously Serena Williams is um a huge one who inspired me, you know as well. I mean we We're very close um going through the things at the same time, but um it's always nice to see someone doing it um Alex Morrigan, I think that there's a lot right now, a lot of women across a lot of different sports and I think about the W. N. B. A. And the examples there and so I just love that my daughter is going to see this and not just daughters, you know um that our kids will see what's happening and that things will be different totally. Yeah I agree. I feel like I feel fortunate to have my daughter is 11. We talk about our daughters and they've met before and it's just it's so cool that they are growing up in a world where um and hopefully brands like athletes are helping them feel confident in who they are and I think that's something that they do have more role models, you know at this point and I was just thinking about you know the partnership we did because you led this around um the last olympics where you know you flag to us, you're like hey women um often the female athletes that are moms have trouble with funding child care sometimes and then we were able to brainstorm together and through our power of she um grant program. We're like giving grants to these women and I think it actually is changing the game a bit right because they feel like they can do both effectively and we're seeing them be successful really. You know, I look back at, you know the women who got grants, I think of Elena my tailor and how successful she was during the winter olympics and my eyes were just open from my own experience of having a child and then figuring out like, okay how does this work? How do I go across the world, how do I bring a baby? How do I breastfeed? Like all of these things that I also think that the systems in place, there were not women who are thinking about these things, they were not the ones who were there when these systems were created and so kind of reworking some of those things and the things that we've done together have really have already started to have an impact Allison shoe brand called um I think we're both wearing and even take a look um and mary Beth Athleta invested in that company and sell station products in Athleta stores are on site and I believe you don't sell many non athletic products right in your stores, You know, why did you decide to make that investment? Obviously have a close relationship with Alison but beyond that relationship, what convinced you to back this company? Yeah, it was a really easy kind of natural decision I'd say because we do have the partnership we have and um to what else and opened up that is such a holistic partnership of just supporting her, you know, also as an entrepreneur and so it just felt like, oh wow, we can help support her in that aspect and it's also great for us because um it's a great product and it's you know fun to have it, you know, available through Athleta and so yeah, we became one of the first wholesale partners and it's been really fun just to see the brand takeoff and still so much more to come. Yeah. And what lessons are you taking from your athletic partnership as you become a founder and entrepreneur? I mean you mentioned the company kind of feels like a big sister. So how is that applying to? Absolutely, I mean, I just think back to our early days and I wouldn't have started without Athleta without them showing me how they do business and how they work with strong women and I think that our missions aligned so perfectly and um for women by women thinking that women deserve better and when we think about shoes, they haven't been made for women sneakers specifically and I had my own personal journey to find that out, but it's just been really, I said it before, but absolutely empowering and I think how rare is it that a company supports an athlete in this way and truly believes in them and offers that support. It's been just amazing. Yeah, reminds me of like I think our first meeting when we met each other like in the office and it was like a room full of women, right? Like women and we're all in it, you were giving your thoughts on the clothes and it's just it is this really empowering feeling of like women designing for women and um I love that there is that alignment between two and so it just makes so much sense. Yeah. What were some of the issues you had with your previous shoes you were wearing that? They were designed for women? Yeah, well, I mean once we dove into that industry um you know I learned that you know sneakers have been made off a lot which is a mold and it's been the mold of a man's foot used to wear make women's sneakers and I just thought I was just appalled by that like we how are we over? I mean I guess it shouldn't be that surprising because women are overlooked in a lot of industries but I was just like this has got to stop and so to put together an incredible team where we designed footwear that will fit the form of a female foot um it's just so x and it's it's more than just shoes, you know, it's about just better companies and companies that see women for their value and their worth and so I am so excited that I get to do this every single day and um get to have this amazing support as well. You know, you had a big moment when you were finishing up your professional career, you were able to wear your sneakers in your final races. Um we've talked about that before too, what that felt like, oh my gosh, I mean even like thinking back to Tokyo and making it back to the olympics after so much hardship and crossing the line and looking down and seeing you know these beautiful shoes that I was competing in. I mean it's something that I probably couldn't have even dreamt of and so it's been um I think the highlight of all of my olympic performances that moment and just what it represented. You know that I was able to show women you know that we can bet on ourselves and we can do things outside of the box in the non traditional way. And it was like the physical embodiment of So I love that moment. Really special. That's an amazing moment. Well what do you think we should look out for in the future? What's coming from station and Alison to Yeah I'm on the stage front. I mean we have an amazing attorney returns policy. We offer a new pair of shoes if you have our shoe and your foot changes due to pregnancy will give you a new pair of shoes. So we have more on that front coming a lot of new exciting designs and styles and um just continuing to um work to make things better for women. Well, thank you both so much for being here with us. It's great to hear from you

Mercedes Abramo, President and CEO, Cartier North America
Shideh Bina, Founding Partner, Insigniam
Jisella Dolan, Chief Global Advocacy Officer, Home Instead
Mary Beth Laughton, Chief Executive Officer, Athleta
Stephanie Linnartz, President, Marriott International

Most Powerful Women 2021 - Where Mission Meets Transformation 

Mercedes Abramo, Cartier North America
Shideh Bina, Insigniam
Jisella Dolan, Home Instead
Mary Beth Laughton, Athleta
Stephanie Linnartz, Marriott International

Where Mission Meets Transformation 

Mercedes Abramo, President and CEO, Cartier North America
Shideh Bina, Insigniam
Jisella Dolan, Home Instead
Mary Beth Laughton, Athleta
Stephanie Linnartz, Marriott International

[MUSIC PLAYING] Art, the big news for Gap is that you finally have hired a new CEO for the Gap brand. What's he going to do to fix it up and get it growing again? He understands the brand. He understands the aesthetic. He's truly an omnichannel executive. He has very high standards in terms of how he execute quality, trend, in-store experience, et cetera. And I think he's got an amazing opportunity here with a great brand to really make Gap brand in a moment in time when the brand's place should be here and now. Bring it back to relevance. What's really holding Gap back? I think part of it, frankly, is the fact that we lost a little bit of the focus of the brand, tried to do too many things, tried to go to places in fashion that didn't make sense for the brand. And that's the other thing I see with him, super tight in his focus about what the brand should be. It's just been the opposite story with Old Navy. It is just doing great. It now accounts for nearly half of the whole company's revenues, a big chunk of profits. What's behind the Old Navy success story? What's the biggest reason? Focus and discipline on what the brand stands for, and executing against what consumers expect every day in a very consistent way. Value, trend, fun, family, those are key parts of the business. And retail is hard, but retail is easy, oftentimes. And it's really about that consistency and discipline. You know, retailers everywhere are all struggling to figure out this balance between how many physical stores you need and how to still keep up the strong online presence and demand. Now you've closed hundreds of Gap and Banana Republic stores. You've opened lots of new Old Navy stores. So do you think you have the right mix here? I think the right mix is dynamic, honestly. We want to be where the customer is, serve them how they want to shop. Basically, they want to browse, they want to buy, they want to fulfill. Be wherever they are, and make money wherever they are doing that. And if that means I close more stores and I grow my e-commerce business at an accelerating rate, I am totally good with that. The customer is going to shop how they shop. We want to be where they are. Do you think you have the right mix, though, of stores and online? We're going to close more Gap stores. It's the oldest label that we have in the business. How many? We haven't said the exact number yet. And over the last several years, we've closed over 600 stores. We're going to continue to be nimble. And we're doing the work right now, and we'll continue to do that, and some Banana Republic stores as well, and open Old Navy and Athleta stores. I've got to ask you about Amazon. It's soon going to be named-- I was really surprised to hear this-- the number one clothing retailer here in the US. What is your strategy to compete with Amazon? You know, our strategy to compete with Amazon, first, is to have great brands. And people come to clothing-- you and I both do-- because of a brand that they love. I've also said very publicly that I want to be where my customer is. And so I'm not shy about like we do in China, doing business with Tmall in China. We continue to talk to everybody in the business that's relevant. And I just want to be present and accounted for and make money where my customer is. What do you think it takes to compete effectively against Amazon? Is there a retailer out there who's figuring it out? My e-commerce business in Q4 grew 30%. So that's a super-- and we have one of the biggest apparel e-commerce businesses on the planet. I think we're competing pretty effectively with Amazon right now. Do you think you can do even more? I do. I do. We've continued to talk about how we can grow our e-commerce business at an accelerating rate. We're super pleased there. And let's remember, 80% of apparel purchases still take place in stores. And that's a place where I can compete with Amazon all day long, because they don't have clothing stores. So looking ahead, let's say, three years from now, what will the future Gap look like? How will it be different from the way we see it today? You know, when you go into Gap, what I want you to see is I want you to see amazing, well-made, versatile essentials for your wardrobe. And that's where Gap is at its strength, a great pair of jeans, well-priced. A great pair of khakis, a t-shirt that lasts and is amazing, a woven shirt, et cetera. Old Navy, fun fashion for the family. Athleta, amazing performance lifestyle. And Banana is really about your more dressy and professional space. And then, what else will there be? I'm looking and have my eyes wide open. All right, so you're telling us that you might make another acquisition? Give us some hints. I love Athleta. That's the hint I would give. We have a great portfolio today. And I believe we're going to be in an environment where we have the resources to add something else to the platform. So you may be looking for more athletic Lululemon-type of acquisition? The performance space, the performance lifestyle space is certainly super interesting. There's other spaces that we're looking at as well. I love the intimates space. We have an amazing intimates business in the company we might build on. And again, not signaling anything imminent, but I'm always eyes wide open and very curious about what's out there. 

Gap CEO Is Looking for Acquisitions: "I Have My Eyes Wide Open"

Finance

Retailer plans to close more Gap and Banana Republic stores and open additional Old Navy and Athleta stores.

aren't the big news for Gap is that you finally have hired a new CEO for the Gap brand. What you going to do to fix it up and get it going again? He understands the brand. He understands the ecstatic. He's truly an Omni Channel executive. He has very high standards in terms of how we execute quality trend in store experience, etcetera. And I think he's got an amazing opportunity here with a great brand to really make Gap Brandon a moment in time when the brand's place should be here and now bring it back to relevance. What's really holding Gap back? I think part of it, frankly, is the fact that we lost a little bit of the focus of the brand, tried to do too many things, tried to go to places in fashion that didn't make sense for the brand. And that's the other thing I see with him super tight and his focus about what the brand should be. It's just been the opposite story with Old Navy. It is just doing great. Uh, it now accounts for nearly half of the whole company's revenue. A big chunk of profits. What's behind the Old Navy success story. What's the biggest reason? Focus and discipline them, what the brand stands for, and executing against what consumer it's expect every day in a very consistent way. Value trend, fun, family. Those are key parts of the business, and retail is hard, but retails easy oftentimes, and it's really about that consistency and discipline. You know. Retailers everywhere are all struggling to figure out this balance between how many physics, physical stores you need and how to still keep up the strong online presence and demand. Now you closed hundreds of Gap and Banana Republic stores. You've opened lots of new old Navy stores. So do you think you have the right mix here? I think the right mix is dynamic. Honestly, we want to be where the customer is served them, how they want to shop. Basically, they want to browse. They want to buy. They want Phil, be wherever they are and make money wherever they are doing that. And that means I closed more stores and I grow my e commerce business, that accelerating rate. I am totally good with that. The customer's gonna shop where they shop. We want to be where they are. You think you have the right next, though, of stores and online. We're gonna close more gap stores. It's the oldest label that we haven't. How many? We haven't said the exact number yet. Um, and over the last several years, we've closed over 600 stores. Um, we're gonna continue to be nimble and we're doing the work right now. We'll continue to do that. Banana Republic stores as well. And open old navy and athletic stores I've got to ask you about Amazon is soon gonna be named. I was really surprised to hear this Number one clothing retailer here in the U. S. What is your strategy to compete with Amazon? You know, our strategy to compete with Amazon first is to have great brands and people come to clothing. You and I both do because of a brand that they love. I've also said very publicly that I want to be where my customer is, and so I'm not shy about like we do in in China doing business with team all in China. We continue to talk to everybody in the business that's relevant, and I just want to be present and accounted for and make money. Where my customers. What do you think it takes to compete effectively against Amazon? Is there a retailer out there who figured it out? Um, my e commerce business in Q four grew 30%. That's a super, and we have one of the biggest, apparently commerce businesses on the planet. I think we're competing pretty effectively with Amazon right now. You think you could do even more? I do. I do. We've continued to talk about how we can grow our e commerce business at an accelerating rate. We're super pleased there. And let's remember 80% of apparel purchases still take place in stores, and that's a place where I can compete with Amazon all day long because they don't have clothing stores. So look in your head, Let's say, three years from now, what will the future gap look like? How will it be different from the way we see it today? You know when you go into Gap, what I want you to see if I want you to see amazing, well made, versatile essentials for your wardrobe, and that's where Gap is at its strength. A great pair of jeans. Well, priced a great pair of khakis T shirt that lasting is amazing. A woven shirt, etcetera, old Navy fun. Fashion for the family, Athleta, Amazing performance, lifestyle and banana is really about your more dressing and professional space. And then what else will there be? I'm looking and have my eyes wide open. All right, so you're telling us that you might make make another acquisition. Give us some hints. I love Athleta. That's the head I would give. We have a great portfolio today, and I believe we're going to be in an environment where we have the resource is toe. Add something else to the platform. So you may be looking for more athletic Lululemon type of acquisition. The performance space that performs lifestyle spaces certainly super interesting. There's other spaces that we're looking at as well. I love the intimate space. We have an amazing, intimate business in the company. We might build on and again, not signaling anything imminent, but I'm always ID y eyes wide open and very curious about what's out there.

Athleta

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