Katie Warner Johnson and Caroline Gogolak, reformed ballerinas and Goldman Sachs bankers, are now betting on a rising trend in the multi-billion dollar apparel market.
In November of 2013, the two launched Carbon38, an athletic wear startup that initially billed itself as a gym bag companion -- selling everything from spandex to juice blends. Now Johnson and Gogolak are focusing on workout pieces. The brand's concept of "athleisure wear" -- athletic clothing that can be worn in non-athletic settings -- is nothing new. But that's not stopping the founders.
On Thursday, the company announced its new "fashion-forward" product line that is set to launch on December 1st. Featuring ten new styles that retail between $100 to $300, the collection of items including dresses, blazers, and ponchos will be manufactured locally in Los Angeles.
As the price points indicate, Carbon38 targets mostly affluent, thirty-something women, who are married and have a hefty amount of disposable income. "As we grow, we definitely expect that our customer base will be more diverse and younger," says Johnson. Currently, sales come mostly from New York City, Chicago, San Francisco and Miami.
Carbon38 is the latest, but certainly not the only player in the booming business of athletic wear. Major retailers are have begun to embrace the market in style, which accounted for a massive $323 billion in 2014 spending, according to data from the NPD Group. Adidas now makes a dragon-print bra top, which retails at $35; The Gap makes a "running skirt" that goes for $40; and Top Shop makes a lace-up sweatshirt for $65 a piece, to name just a few examples.
While the company's demographic is not especially unique, its marketing technique is. Gogolak and Johnson make a point of using fitness instructors as models on their website, as opposed to traditional models. In many ways, it makes sense: the muscular look-- versus traditional skin and bones -- is now gaining traction.
The founders also explain that it's lucrative. Fitness instructors typically have a very extensive social media following, and can appeal directly to their target audience. Users navigate directly to the model's Instagram feed from the Carbon38 website, and vice versa, to the items that those models choose to post on their own feeds.
Thus far, the company has generated over $354,253 in sales through its fitness ambassador program, where 380 vetted instructors refer clients to the site for a fee.
"Activewear is a different beast," explains Gogolak. "She [the customer] wants to see it in movement, and she wants to see it on someone she can relate to."
To test the waters, Carbon38 launched two separate brands with similar price points. One brand was shot using a traditional model, and the other was shot using a yoga instructor. The first model achieved a 38 percent sell-through within the first two weeks, and the second achieved as much as 72 percent during the same time frame.
That, says Gogolak, is testament to the fact that women are attracted to a variety of styles and body types -- not just a classical, white conception of beauty.
Although the startup refused to disclose its revenues, it has successfully raised $5 million in its most recent seed funding round, including from high-profile investors Montage Ventures and Winklevoss Capital Management.
Carbon38 has garnered the attention of the fashion community, too. Christine Beauchamp, the brand president of Ralph Lauren and former chief executive at Victoria's Secret Beauty, is an investor and advisor to the startup.
With Lululemon alone posting 16 percent growth in 2014, or $453 million in revenue, the competition is daunting. But Carbon38, which boasts marginally cheaper price points than the yoga pant behemoth, is confident that its clothes are "the next big thing," precisely because they're modeled by the women who know them best.