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Volume 21 No. 48
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Rhone taps into high-end ‘athleisure’ activewear market

Founded in 2013, Rhone is built on a belief that men will pay a premium for quality, comfortable activewear.
Photos: COURTESY OF RHONE (3)
Sitting in a boardroom in early 2013 as he pitched the concept behind his latest venture, Nate Checketts was not getting the reception he envisioned.

As Checketts, co-founder and chief executive of high-end activewear company Rhone, explained to a product development agency the concept behind the brand — that men would splurge on activewear as long as the garments were worth it — the agency’s executives weren’t enthused by the idea.

“They said, ‘Our opinion, and what’s been known in the activewear industry, is that guys don’t care about hand-feel of the material, or care about durability. They’re a much more price-conscious consumer,’” Checketts said, recounting the conversation. “And we said, ‘Maybe we’re not representative of the market, but that’s not what we think at all.’”

WHAT'S IN A NAME

“Rhone is a glacier in Switzerland that flows into a river in France. It’s a beautiful region but was also used as a functional trade route. We liked that the name represented aesthetics and function.”
 

— Nate Checketts
Checketts, 33, was convinced there was a gap in the U.S. activewear market, which last year accounted for $97 billion in sales, according to Morgan Stanley. And the son of longtime sports business power player Dave Checketts has parlayed that vision for high-end activewear with his family’s connections in the sports industry not only to create Rhone, but also to bring onboard a list of financial backers that includes former NBA Commissioner David Stern, former ESPN and NFL Network head Steve Bornstein and ESPN Radio host Ryen Russillo.

With an increased focus on fitness and health in major markets like the U.S. and China leading to a 42 percent increase in global activewear sales from 2009 to 2015, Checketts thought there was a dearth of companies making quality, male-focused “athleisure” — or athletic wear versatile enough to be comfortably worn both in a gym and a social setting.

“That’s why Rhone started: We felt like you were having to choose between clothes that looked good and clothes that performed good, and that’s just not a great option,” Checketts said. “Big companies move like cruise ships; they can’t turn on a dime. … That opened up space for us to come in and say, ‘We think there is a need for us in the market.’”

KEY EXECUTIVES

NATE CHECKETTS, co-founder and chief executive
KYLE McCLURE, co-founder and creative director
CORTNEY ANSEL, senior vice president of sales
ADAM BRIDEGAN, vice president of search marketing and acquisition
MARISA GRIMSHAW, director of communications
BEN CHECKETTS, director of marketing
BRADFORD MALT, director of strategy and growth

RETAIL LOCATIONS:
More than 220 nationwide, including Bloomingdale’s, Nordstrom, Equinox and REI

Through research, Checketts and fellow Rhone co-founder Kyle McClure realized that the U.S. military and NASA had in the past embedded clothing with the odor-killing, antimicrobial element of silver. That sparked the idea to buy higher-quality, stronger fabrics; embed them with silver plus other performance-enhancing elements; and present the finished product in a noncluttered, largely logo-free manner (with inspirational quotes stitched on the inside seams).

Those qualities have become pillars for the Connecticut-based company, which has 15 full-time employees and has raised more than $6 million in financial backing since its November 2013 founding. For example, most activewear loses its odor-protecting ability after 15-20 washes; Rhone touts that research has shown its garments retain their odor-protecting qualities through the average life of a garment, or up to 50 washes.

Because it spends roughly $8 per yard of fabric to buy the more durable and soft fabrics, while big-box brands spend closer to $2 to $4, Rhone charges a premium. Sweatshirts range from $98 to $199; tank tops are $54; a pair of pants ranges from $98 to $118. But with revenue set to hit close to $9 million this year — up from roughly $3 million in 2015 and $600,000 in the brand’s first year of sales, 2014 — and a growing stable of bold-face-name sports business executives, athletes and media figures taking equity positions in the company, it seems Rhone is finding the niche that it originally envisioned.

Rhone apparel weaves together more durable, higher-quality fabrics with performance-enhancing elements.
“There are people [making high-quality activewear] that are primarily focused on women, and here was an opportunity to exploit men,” said Bornstein, an early investor in Rhone, who is former CEO of ESPN and NFL Network and now Activision Sports chairman. “We learned that at ESPN a long time ago — men still buy toothpicks. The fact of the matter is, men do want to have smart and high-quality product — and that’s what Rhone’s providing.”

Former NBA player Shane Battier, another Rhone investor, said: “There’s a lot of really good stuff being made for my wife … but when men try to wear it, there’s a stigma [attached] to it. So [Nate’s] thesis was simple: Let’s create a higher-performance brand for men that is comfortable, high-tech, performance-oriented — but you lose all the stigma.”

Rhone is sold both direct to consumers on its website and in more than 220 retail locations nationwide. Those include upscale department stores Bloomingdale’s and Nordstrom, outdoors retailer REI and luxury fitness club chain Equinox.

Rhone’s products are designed to be versatile enough to be worn while working out or relaxing.
Checketts said the company is focused on the U.S. for the foreseeable future, though it is working on some direct-to-consumer international options.

“They’re moving to an area that is not co-opted by the big players; they’ve chosen a sort of athleisure wear that men are willing to pay extra for … and that’s something that’s not going to move the needle for Nike or Adidas at this point,” Stern said. “While [the bigger players] seek their Olympic endorsements and player endorsements and the like, I think Rhone has chosen a very good niche — and it’s going to be quite profitable.”