For lifestyle brand TravisMathew, growth’s been anything but leisurely over the past five years.
When the Huntington Beach-based apparel company was acquired in 2017 by Callaway Golf Co. (NYSE: ELY) in a $125.5 million cash-and-debt deal, the then largely golf-focused brand reported about $61 million in revenue and $7 million of adjusted earnings before interest, taxes, depreciation, and amortization, thanks primarily to sales of men’s polo shirts and hats.
Fast-forward to today, and the company’s Carlsbad-based parent company expects TravisMathew to bring in closer to $300 million in revenue, with adjusted EBITDA of around $50 million, as it offers a larger base of casual wear products, including a new women’s line that launched last week.
Callaway officials said late last month during an investor presentation that they see a “clear path” to over $500 million in net sales, and a potential to hit the $1 billion mark, calling TravisMathew a “national brand transitioning to a global brand.”
In a research report published following the presentation, Jefferies analysts noted that “TravisMathew has been well known to be a home run acquisition, but we believe its scale and future opportunity surpasses even most bulls’ estimates.”
TravisMathew, with some 200 workers at its Surf City headquarters, is among the fastest-growing companies in Orange County’s expansive and varied apparel industry (see list, page 17).
The TravisMathew business “has been just performing exceptionally,” Callaway President and Chief Executive Chip Brewer said during the nearly $4 billion-valued company’s latest earnings call, in February.
The locally based division, helmed by President and CEO Ryan Ellis, is clearly a standout performer for Callaway, which got its start as a maker of golf clubs and accessories but has since expanded to also own the Topgolf entertainment business, and fellow apparel company Jack Wolfskin.
“The brand momentum there is amazing,” Brewer said of TravisMathew.
The parent company reports its first-quarter earnings on May 10.
Chalk up much of the growth to a changing workplace dress culture.
TravisMathew’s shirts, pants, shoes and other accessories—a more upscale version of the athleisure apparel segment that’s been a top performer the past two years—are increasingly in vogue in post-pandemic offices as many businesses have gone more casual.
Founded in 2007 by Travis Johnson, Travis Brasher and John Kruger, the company got its start making clothes for the golf course with a West Coast flair, saying it drew “inspiration from the culture and lifestyle of Southern California’s surf, sand, and sun.”
Its popularity has moved well beyond the links.
The brand “is outside of golf already,” Callaway’s Brewer told analysts. “It’s really a lifestyle apparel brand. It has its roots in golf, but it’s what we wear to the office. It’s what you wear after golf when you go out and socialize.”
Retail Ramp Up
Callaway has put an emphasis on expanding TravisMathew’s retail presence since its 2017 acquisition.
At the time of the purchase, it had five stores in total, including its headquarters store; at the end of 2021 there were 31 stores open, and Callaway expects TravisMathew to have 41 stores open by the end of this year.
The company is aiming to open more than five stores a year going forward, with international expansion in the works; it counts a spot in Japan and is opening a spot at the famed St. Andrews golf club in Scotland.
First-quarter 2022 same-store sales were up over 50% year-over-year, Callaway reported late last month during its annual investors day event.
“This business is getting big fast,” Brewer told analysts.
Fashion Island Revamp
New additions to the TravisMathew’s retail portfolio include a revamped flagship store at Fashion Island opening next month, according to the company. The company’s first store opened at the Newport Beach mall in 2014.
Don’t expect to walk into your typical golf pro shop when shopping at the Fashion Island spot, officials note.
When you “go into their stores, you’re buying hoodies and cloud collections, essentially fleece, and outerwear,” Brewer said during the company’s latest earnings call.
“That’s one of the things that I really loved about the brand when I looked at it because the scale and potential of that business is way above golf.”
In addition to stand-alone spots, TravisMathew has a partnership with Nordstrom, Dick’s Sporting Goods and other golf-focused sporting goods stores.
The brand’s newly launched women’s collection will continue in TravisMathew’s move to casualization fashion. The apparel line follows the company’s first women’s product released as part of a His and Hers collection last year, which sold out according to TravisMathew.
“We have a fast-growing customer base where over 25% of purchases are made by women, so we know there is already a demand and we have been working on a strategy to launch a women’s line for a long time,” TravisMathew CEO Ellis said in a statement.
“We didn’t plan on launching this new line until we identified a gap in the market for our line.”
Ellis expects the item-driven line to become a key driver in the company’s path to $500 million in future sales and its anticipated $1 billion benchmark.
Family, Sporting Ties Drive ‘Athluxury’ Co. Leovici
Brent Wheatley is putting his pro sports background, and his family ties to the apparel industry, to use at Leovici, a growing luxury apparel company in Tustin.
Wheatley is the third generation of style and sports in his family. His father Robert Wheatley—namesake of the Wheatley Firm, a Tustin-based workers’ compensation law firm—was a co-owner and former general counsel of Huntington Beach-based retailer TravisMathew (see front-page story), and his grandfather was reportedly on the original board of the sports giant Nike.
Leovici was born after years of taking notes from the family history—the chief executive remembers creating T-shirts for his high school friends.
“It’s something I wanted to do forever,” Brent Wheatley told the Business Journal.
After playing in the minor leagues for the Marlins after graduating from University of Southern California, Wheatley began his passion project while attending Fordham University’s School of Law and launched the self-described “athluxury” brand’s first collection in 2019.
Athluxury, a play on the growing athleisure segment of the apparel industry, was coined to describe the high-end athletic apparel his company produces.
The company’s current offerings include a variety of polos, dress shirts, hoodies, hats and other accessories, with a starting price around $100 for shirts.
Leovici’s most recent collection celebrated Jackie Robinson, the first African American to play for Major League Baseball (MLB).
Wheatley partnered with current Seattle Mariners shortstop JP Crawford to design the collection for its sophomore year. Crawford’s idea was to focus on Robinson’s jersey number, 42, and each piece features the number in a minimalistic approach for everyday use.
“The number 42 means everything to me. Without the legacy of Jackie Robinson, I probably wouldn’t have been born. He broke barriers that were larger than baseball,” Crawford said.
Wheatley hadn’t seen a high-end apparel collection celebrating the historic player and thought he could be the first. The “42” collection launched on April 15, Jackie Robinson Day, an event to commemorate his MLB debut.
Products in the collection include shirts that run $95, and hats $55. Proceeds go the BaseballGenerations Foundation, a nonprofit that provides mentorship and life skills to South LA youth.
Leovici plans to partner with other athletes and celebrities to design apparel collections, and donate proceeds to a charity of their choice.
It was a cause Wheatley and his father, who is involved in the company, wanted to develop as a priority for Leovici.
“We’re giving [our partners] a chance to express themselves creatively.”
The company’s aiming to have a charity collaboration program take place once a month as the company ramps up.