“Real†should come from direct communication with consumers, rather than credulously “consumer demand†or “Lululemon-style success†in the investment population.
As if yesterday, Rishi Bali was still fighting high. Like many emerging casual sports brands, Yogasmoga, founded by him, is determined to be the next Lululemon and confident to stand out.
“Yogasmoga's shirts and trousers are the softest and most durable. The fabrics are made of high-end fabric Aurum made of Lycra and Supplex durable nylon blends. These fabrics are made in the US, allowing Yogasmoga to make trends. A real-time response."
But just this week, the New York-based company filed for bankruptcy in a local court in Manhattan. According to WWD, its total assets are between $1 million and $10 million, but the debt figures are close to this level. There are currently 50 to 99 creditors.
In an interview with racked.com, Rish Barley's explanation of the reasons for bankruptcy sounded particularly familiar: disagreement with major investors, unable to complete a new round of financing, leading to a broken capital chain. "For a variety of reasons, we have financial difficulties. Our development is a bit too fast, and filing for bankruptcy is also to slow down."
Founded in 2013, Yogasmoga was founded as the Director of Operations at Goldman Sachs. The brand started out as an e-commerce company. In 2015, it opened two physical stores, and this year it expanded by 10 in one breath. When just raised $12.5 million in venture capital in March this year, Bally was also preparing to increase the number of stores to 25, and put the rest of the money into the research and development of high-tech fabrics and beautiful hard photos.
The problem seems obvious: the funds are burned in cost inputs that are not immediately effective, and blindly expand when the team is not yet familiar with how the physical channel operates, how the sales rhythm and inventory backlogs are handled.
The more serious problem is brand positioning: no consumer needs a second Lululemon, but in the past three years, Yogasmoga's marketing expressions and business decisions have been too frequently marked the beginning of this yoga pants. In the original invitation letter issued to the media, the words "Lululemon has a new opponent!" are written. Last year, Bally mentioned in an interview with Bloomberg and The New York Times that "we will do better than Lululemon because we are more real." They even spent two years developing a black dye just to ensure that the “pivot pants†that Lululemon had seen in 2013 did not occur.
But “reality†should come from direct communication with consumers, rather than credulously “consumer demand†or “Lululemon-style success†in the investment population.
Indeed, there were few analysts who denied that sportswear and sportswear would be a hot market in the long run. The New York Times described the market's needs as follows: “Young consumers are increasingly looking forward to a healthy lifestyle. The images of cold-pressed juices and yoga classes posted and forwarded on Instagram are more than new Coach handbags or MaxMara dresses. At the same time, the application scenes of sports and leisure apparel have become more extensive, and they have begun to appear in formal occasions such as offices and banquets.
But that doesn't mean that the market, with a total value of $97 million, is better. On the contrary, the influx of too many brands has made it too saturated, and a large number of unrelated brands have become competitors in this category: sports brands Nike, Adidas, UnderArmour, fast fashion brands H&M, Gap, OldNavy, Target, E-commerce brand Net-a-Porter, underwear brand Victoria's Secret.
After KanyeWest, the stars also began to eager to try this market. Beyoncé, SelenaGomez, HeidiKlum, CarrieUnderwood, and Jessica Simpson all launched their own line of sportswear and apparel. "Fortune" has a proper analogy: "Yoga pants are a new version of the perfume (yogapantsarethenewperfume)."
In this context, even if you can really copy a Lululemon, it is difficult to win more discerning consumers.
Rish Barley felt that filing for bankruptcy was just a means for Yogasmoga to "continue to develop in a more appropriate way." “We also have a group of consumers who are very sticky to the brand. Only some stores will be closed during this time, and I still manage the brand full time.â€
But it's hard to say whether other similar brands can be like Yogasmoga. Even if the capital chain breaks, there is still a chance to rely on the core user base and products to make a comeback. Perhaps any kind of market trend is the same - Normcore, cold pressed juice, collars - at the moment of reaching the peak of popularity, may also be the beginning of a downhill slope.
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