The sale of Los Angeles blanks business Bella + Canvas has turned heads. That’s mostly due to what the deal means for its now former sister division in Alo Yoga.
On Monday, Issaquah, Wash.-based SanMar Corp. closed on its purchase of Bella + Canvas, a blanks manufacturer that’s been in the market since its 1992 founding. Financial terms of the deal were not disclosed.
The market wasn’t necessarily clamoring for details. Instead, the deal is being viewed as a path forward for Bella + Canvas’ now former sister brand in Alo Yoga to move forward on an initial public offering or sale, as reported by Reuters.
The logic?
Some say Bella + Canvas served as the red-headed stepchild in valuing Alo Yoga, a luxury activewear brand. That’s different from the price points of Bella + Canvas, which sells at wholesale to brands.
Color Image Apparel — parent of Bella + Canvas and Alo Yoga — founders Danny Harris and Marco DeGeorge have been tight-lipped on what their long-term intentions are for the Alo business. However, they reportedly tested investor waters in 2023 in what could have valued the business at $10 billion, Reuters said. The sentiment from the financial community was apparently confusion over how to value the company with the inclusion of Bella + Canvas, the report said. They’re different businesses and price points.
Path Forward?
There is another point to consider in the crowded athleisure segment that includes the legacy brand Lululemon and newcomers such as Vuori and Skims.
That alternate view would be revenue diversification.
Inevitably, brands eventually hit a point of stagnating growth. There are only so many expansions to be had in new categories or markets before a business hits a wall. When that happens, analysts get antsy and investors get bored. The case could be made that’s even more true in the premium and luxury spaces. Yes, fewer consumers can be offset with higher-margin product, but the limitations remain in the long run.
Keeping a blanks business would have offered investors a diversified business, particularly if the company went public. It would have ensured another revenue stream completely separate from athleisure and any erosion in that business due to a pullback in consumer spending or shifting apparel trends.
Bella + Canvas, while never rising to the status of a well-known consumer brand like that of American Apparel at its peak, is still a premium blanks business. It was just never shepherded into an actual brand like American Apparel or its successor business in Los Angeles Apparel. Both of those companies struck the right tone in advertising and operated their own stores to take their brand story direct to the consumer.
Bella + Canvas has made attempts to do so, but it’s dug its heels into marketing itself as a supplier for brands. That’s not a story the consumer necessarily understands.
Still, the company has made attempts at going direct. Bella + Canvas was the official blank apparel provider for this year’s Coachella Valley Music and Arts Festival and created a museum-like installation touting its role in festival merchandise over the years.
Ultimately, building a brand is hard.
Alo Yoga launched in 2007. It began gaining traction nearly a decade later, when it made waves opening its cavernous flagship store on Canon Drive in Beverly Hills as the label grew its celebrity following for its upscale yoga wear. Today, the business has ballooned to include knits, trousers, dresses, footwear, skincare, haircare and bags.
With the Bella + Canvas deal done, it remains to be seen whether the market sees Alo’s founders, the sole owners of the business, once again try to shop all or part of the company to outside investors.
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