By Barry Janoff
September 23, 2015: Rhone Apparel is driven by many inspirations, among them: Men can smell, but their workout clothing doesn't have to.
Sales of sports active wear is on the rise, supported by consumer needs to exercise in gear that is ever-more comfortable, durable and resistant to such workout enemies as sweat and odor.
Add a growing number of fashion-conscious consumers to the mix and you have the burgeoning category known as "athleisure."
U.S. consumers spent $323 billion on apparel, footwear, and accessories in 2014, according to research and consulting firm, The NPD Group. The 1% increase versus 2013 translated into an additional $2 billion in sales.
"The trend for consumers to wear athletic apparel and footwear beyond the gym is driving sales, accounting for $33.7 billion or 16% of the market in the year ended June 2014," according to the Port Washington, NY-based company.
“Casual and ‘athleisure’ have taken on a life of their own,” Marshal Cohen, chief industry analyst, for NPD, said in a statement. “This is no longer a trend — it is now a lifestyle that is too comfortable, for consumers of all ages, for it to go away anytime soon.”
Some of the players in the active wear category are the usual suspects: Nike, adidas, Reebok, Under Armour and Lululemon.
But one relatively newcomer is already leaving its mark among consumers and investors, with plans to become one of the category's biggest players.
Rhone Apparel, founded in 2012 by Nate Checketts and Kyle McClure, describes itself as a "premium active wear company that produces high-quality attire for men." It's mantra: "Created to fill the current void in the menswear market, Rhone speaks directly to how the modern man lives, works and sweats."
In addition to its focus on overall quality and the use of high-end material, Rhone has included some unique aspects to its product line. Among them, the Valhalla Compression short, which was made to offer complete support through articulated flat-lock seams, a wide waistband, mesh panels in high heat zones and SilverTech threads that, per Rhone, "block man stink."
Based on its information, NPD said that 30% of consumers are aware of products that offer odor control, but only 24% have an interest in buying these products. By comparison, there is a 57% awareness of stain-resistant products, a 42% interest in buying these products and a 41% awareness in products that offer moisture-wicking.
Rhone is also becoming known for having inspirational quotes on the interior seam of their garments, such as “Never mistake motion for action” and "May the brave live forever."
During a seed round in late 2013, the company said it raised $1.2 million in financing.
Earlier this week, Rhone unveiled the closing of a $5 million Series A financing. The round included sports, media and fashion investors, among them: Steve Bornstein, former president, CEO and evp-media for the NFL Network and former chairman, president and CEO for ESPN; David Stern, NBA commissioner Emeritus; ESPN radio host Ryen Russillo; and former NBA player Shane Battier.
The group also included M3 Ventures, an investment fund managed by former CAA executive Martin Dolfi, which is "focused on early and growth stage consumer brands."
Initially available at Bloomingdales and Equinox locations as well as on Nordstrom.com, Rhone apparel — which includes shirts, tank tops, shorts, socks, hats and hoodies — is expanding its presence in those locations as well as in CorePower Yoga, gyms and specialty stores.
Rhone is planning a 4,000 square foot retail storefront and office in Stamford, Conn., by early 2016, will re-launch its e-commerce site "with a focus on customer experience" and also will open a pop-up space in New York's Soho district this October, which would remain open through the holiday season.
Checketts, 35, has been involved in business start-ups and venture capital situations since she was a teen. He also is no stranger to the world of sports business. His dad, Dave Checketts, has a resume that includes GM for the NBA's Utah Jazz, CEO for New York's Madison Square Garden, founder of SCP Worldwide (which owned and operated the NHL's St. Louis Blues) and CEO for Legends Hospitality, a turnkey service provider formed by the New York Yankees and Dallas Cowboys.
NYSportsJournalism spoke with Nate Checketts, CEO in addition to co-founder, about building the Rhone brand, the challenges of creating a company in a field of established rivals and reaching consumers through marketing and innovation.
NYSportsJournalism.com: Is your competition Nike, Under Armour and adidas, or have you created a new category?
Nate Checketts: I see it as a combination. We actually fit between two different categories: Leisure and activewear. We are often called an 'athlesure' brand, which is a relatively new term, but not one that we created. We feel our products allow guys to transition from walking around with friends to going right into the gym for a workout. We are seeing interest from the active side and the lifestyle side.
NYSJ: There is a new spot on YouTube ("We Invite Men Everywhere To Live #ForeverForward") that offers people an insight into Rhone. Do you see word-of-mouth and social media as your main marketing drivers, or are you planning marketing campaigns?
NC: Our plan is to reach the influencers and get the product into the hands of the right people. Telling our story and getting exposure. Anything that can help us do that, we view as positive. We have a good presence on social media, which is growing, so we get a lot of exposure that way. The main thing that drives us is to make the best product, so that when people try it they tell their friends about it.
NYSJ: You've seen the pros and cons of having products endorsed by and associated with specific athletes. Are you looking to sign endorsements or would you want an athlete to endorse your products simply because they like them and wear them in public?
NC: We do not have any formal endorsement deals right now. Part of the reason is that the consumer ends up paying for that. Those endorsement deals are not free. So on top of paying for the best fabrics and production to get our products to market, there would be the question as to whether our consumers would want to pay more just to see an athlete wearing our products. I believe we can win athletes over just by the quality of the products. We have had situations where we've compensated someone in the form of gear just to try it. But often times, that's enough. We are having people invest in the company. Shane Battier, for example, believes in what we are doing. He didn't ask for anything above and beyond. He just wanted to be part of it. That won't always be the case. There will be situations where we are going to have to rethink that. But we will face those situations as they come.
"We said to guys, Beat these shirts into submission. Beat these shorts into submission. Stick them in your gym bag for a week. Then see how they perform."
NYSJ: Mission Athletecare is a company that creates products for athletes and consumers with the assistance of athletes, some of whom are investors in the company. Have you gotten feedback from athletes, friends, people in the industry offering advice, suggestions on designing your products or on new products?
NC: What differentiates us is that we have a much quicker turnaround. We are not a massive company where everything has to go through several layers. We took prototypes and gave them to guys whose opinions we respect and who have been successful in their athletic pursuits. We said to them, Beat these shirts into submission. Beat these shorts into submission. Work out in them. Stick them in your gym bag for a week and then pull them back out. See how they perform. And we still follow that strategy when we innovate and find ways to improve.
NYSJ: When you talk about your target demographics, would that be guys who exercise as well as pro athletes?
NC: Our target is much more the guy who works out on a regular basis or plays hoops in the gym or at the park rather than pro athletes. Having grown up around pro athletes, I have a tremendous amount of respect for them and the things they have accomplished. But I knew pretty early on that I wasn't going to be a guy who would become LeBron James. So my inspiration has been the guys who are more accessible, who like to work out and compete against their friends and others at the local gym, guys to whom I can relate. And that's who we have as our primary target.
NYSJ: It seems as if you were taking a different route right from the start.
NC: One of the things that drives us is to challenge every assumption. To question why things are done they way they are. We are always looking for ways to improve. For example, we use a really expensive but high-quality mesh called 'power mesh.' It's very difficult to break through, rip or tear. One reason we created this is so people can have their phone at all times in all places, when they're lifting, when they are running, and not have it rip through their shorts.
NYSJ: What is the backstory to where you are and how the company came about?
NC: The origin of the brand began when my brother-in-law and I, both heavy into fitness, but also gear junkies and always talking about workout and fitness gear, didn't like the workout gear we were wearing. I was working at the NFL at the time, which gave me access to a lot of new products. We also saw a growing trend among women that they were wearing quality, fashion-style workout clothing that fulfilled their needs when exercising. But many men were still wearing raggedy clothes when they exercised, most likely that came from their college days. Another thing I noticed was that workout gear worn by guys would retain that sweaty odor, even after it was washed. And that the smell would still be there, and even get worse, after 10-15 washings.
NYSJ: Where did you go from there?
NC: We did some research and found that the way clothing fights odor is with a chemical agent that is applied to the item after it is produced. And that the industry standard is about 15-20 washes, which means that it gets worse each time you wash it. By the end, there is no chemical agent left. And worse, its coming off onto your skin and into the washing machine. And you're left with clothing that is absorbing odor and bacteria. It's as if the companies want the clothing to go bad so that you have to go back to buy more. That's disappointing.
NYSJ: Was there something specific that turned on the creative light in your head?
NC: In doing our research, we found that NASA and U.S. Special Forces use an encapsulated silver fibre put into clothing as it is being manufactured to fight odor and bacteria, which lasts pretty much for the lifetime of the garment. We found that there were garments being made like this for women, but that no one was doing this on a broad-base scale for men. We sweat. We smell. So we set out to create men's workout clothing that was a bit more refined, more sophisticated than what was available, and also without a huge company logo on the chest that made you feel like a walking billboard. It would have to come with a bit more of a premium price-point. So we felt that if would could target high-end wholesalers and go direct to the customer, we could make better products and still keep the price-point accessible.
NYSJ: It seems to be a badge of honor among guys that when they play hard or work out they sweat and smell, so is part of the challenge getting guys to change their thinking?
NC: (Laughs.) I think that attitude has changed over the last five years, at least among the demographic that we are targeting, 25-50-year-old men. You can look like you've had a hard workout and be sweaty from head-to-toe and not smell good. But what we are saying is that the sweat and odor is going to come out of your clothing when you wash it. Guys walking around in clean garments but still smelling like body odor is not something that any of us want. During a workout is a different story. But if you are wearing workout clothing that has been cleaned, you shouldn't smell like your last workout.
NYSJ: What's the origin of the inspirational slogans on your products?
NC: We've named all of our clothing lines after inspirational male icons: Winston Churchill, John Muir, Teddy Roosevelt, Abraham Lincoln. These are the people who inspire me to be better at what I do on a daily basis: I'm a husband, a dad, a businessman. I don't necessarily get the same level of drive and inspiration if I were a professional athlete.
NYSJ: Your background is business and sports related, so did you have to get an education on the science side as to how the elements that you put into your garments work or would not work and the distribution side as to how best to your products to consumers?
NC: (Laughs.) I knew that science wasn't my area of expertise, so we hired expert product people to work with us. And part of not coming from the clothing industry meant we had to find people to help us navigate the challenges. And I see that as being our strength as much as anything else because we didn't come in with preconceived notions or with limitations as to where we could go and what we could do. People from the industry say to us, Why did you ever think this would work? And I say to them, It never crossed my mind that it wouldn't work. Had I come from the industry I'm sure I would have been questioning myself the same way.
NYSJ: What do you see as your short-term and longer-term goals?
NC: We need to keep our eye on the ball, so to speak. Really try to get our product into the hands of our target consumers. We have plans for pop-up stores and other ways to get the product to more people and to have more people hear about us.
NYSJ: Having grown up in the sports industry, despite all the things you know, you are determined to keep going?
NC: (Laughs.) You can't accomplish anything without trying and facing challenges. My dad is a great example of that. So many times he's gone out and ventured everything. He hasn't won every time, but the times he has won make up for the times he has lost. Venturing and the adventure is a part of life.
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