SES followed up with Vuori Co-Founder Joe Kudla to find out more about Vuori’s significant new investor, Norwest Venture Partners.
Vuori is the fast-growing active line with a beach lifestyle aesthetic that has a rapidly growing direct and wholesale business. Rapidly as in 180% revenue growth last year.
In addition to its e-commerce business, Vuori currently operates three stores in Encinitas, Manhattan Beach and San Francisco, Calif.
(For more details about how Vuori got started and about the product and business strategy, see our previous in-depth interview with Joe here. They have a very inspiring story.)
How will you use this new investment?
Joe Kudla: Vuori continues to be in a dynamic growth phase so the primary use of this capital is to fuel this growth, namely in continuing on our mission to build a world-class team, purchasing inventory, expanding our marketing efforts across all channels of the business and executing a methodical and well calculated vertical retail expansion.
What was the valuation on the deal?
Joe Kudla: We aren’t able to disclose valuation. Norwest invested $45 million and assumed a minority ownership position in the business.
While Vuori management will maintain control of the business, we see this partnership with Norwest as just that – a partnership. We are thrilled to have them on board and while they are not an operating partner, we feel their growth equity team is well aligned with our values and will be very helpful as we navigate the dynamic growth that lies ahead.
How much did Vuori grow in 2018?
Joe Kudla: We experienced 180% growth in 2018 and we are on track for another big year in 2019.
But what is more important to us than the number is the way in which we are growing. We believe in smart, calculated growth and selective wholesale distribution.
It is exciting to see the growth continue without compromising our distribution strategy or the brand we have set out to build.
How many employees do you have now?
Joe Kudla: Currently we have 70 employees including retail and our new distribution facility in Mexico.
With regard to retail, what have you learned from the three Vuori stores you have opened so far?
Joe Kudla: We have learned a few key lessons from the stores we operate today.
The first and probably most important is that you have to actively engage with the communities your stores exist in. Gone are the days when you can open a store and assume customers will find you, walk in the door and make a purchase. It is more important than ever to utilize your space as a hub for a brand experience that extends beyond the four walls of your stores out into the communities they serve.
Great brands facilitate positive human-to-human connection and bring folks with aligned values together to share in an experience.
We believe that stores need to be a natural extension of that. If a store is truly in service to its community it will be embraced and ultimately be successful.
The second key learning is that more than ever before, authenticity is critical. Folks today are not as interested in walking into a store that looks like it was manufactured on a production line. Stores that take the time to translate the depth and richness of their brand into the experience of shopping their store will be successful.
The last thing is that there is no substitute for being nice. Hire amazing people, train them well and instill a culture that supports them in doing the right thing and treating your customers well.
Where do you want to open new stores?
Joe Kudla: We are working on our retail strategy now. We don’t want to plant a flag in every major market across the U.S. Rather, we want to be thoughtful and patient as we work to identify the right, key locations where Vuori will be embraced and ultimately thrive.
What did you like about you new investor, Norwest?
Joe Kudla: I believe that great consumer brands typically have two things going for them – they make great products and they are comprised of great people.
We are very diligent about the people we welcome into our growing family because culture is so important to us. We believe that our brand is a direct reflection of the culture we are building within our four walls.
We viewed the process of picking a financial partner no differently than hiring a team member that will be working with us here in the office day in and day out.
The folks that we have had the pleasure of getting to know at Norwest are not only great people with incredible strategic insights, but they understand and believe in the long-term vision and path forward for Vuori. We think they will be a great addition to the team.
