There’s been another changing of the guard at Outdoor Voices.
Ashley Merrill, founder and chief executive officer of the high-end sleepwear brand Lunya, has joined the activewear brand as chairwoman of the board. Merrill’s appointment is in conjunction with a new round of funding from her “investment platform,” NaHCO3, the company said in a statement Sunday.
Financial details of the funding round were not disclosed.
At the same time, Ty Haney, the founder of Outdoor Voices, who had stepped down as ceo in February following a reported rift with Millard “Mickey” Drexler, who had been an investor and board chairman since 2017, is planning to once again take a more active role in the company.
Drexler left Outdoor Voices last year and is no longer involved with the company, according to sources. He could not be reached for comment. Haney had remained quietly involved in the company as “founder” and a member of the board. Last fall, Haney and her husband, Mark Wystrach, lead singer of the country band Midland, welcomed their first child.
Since her departure as ceo, the top role had been held on an interim basis by Cliff Moskowitz, the former president of Interluxe, a New York investment firm. He has now exited Outdoor Voices.
Merrill, who was a venture capitalist and media executive before launching Lunya in 2014, will essentially serve as ceo until a successor is named. She said in an interview Sunday that she opted to be board chairman rather than ceo because she continues to helm Lunya and has two children. “There are only so many hours in a day,” she said with a laugh, adding that she agreed to step in and be “incredibly active” until a long-term operator is found that can dedicate him or herself full-time to running Outdoor Voices.
Merrill said she has been familiar with the activewear brand as a customer for years and felt a certain kinship with the “female-run direct-to-consumer business” that had many similarities with Lunya.
“I saw the company was having trouble the same way everybody else did, in the media,” she continued. “I wanted to reach out since there are so few female founders running big companies and thought I could offer a sense of shared purpose.”
So she contacted Haney as a “casual connection point,” and soon realized that the skills she had gained at Lunya “could be useful” for OV as well.
According to those media reports, OV had a valuation of $110 million in 2018 but that figure had dropped to $40 million earlier this year — before the pandemic. The New York Times uncovered a prospectus that showed the business lost $19 million on an adjusted basis in 2018 when sales were $38 million and a projection that losses would continue through 2021. The company expanded quickly and wound up having to terminate employees, close its New York office and put the brakes on store openings as it sought additional financing.
The company declined to comment on the numbers, saying it was a private company.
“Hindsight is 20-20,” Merrill said. “I can look back at Lunya and there are a million things I did wrong. Right in the beginning, Outdoor Voices raised a lot of capital, and with that comes a lot of pressure for top-line growth.”
She said attempting to raise revenue, increase scale and build an organization all at the same time is a daunting task, and was the reason OV struggled. As a result, the company now needs a strong leader who is aligned with the strategic direction perspective, she said.
Although the amount of her investment was not disclosed, Merrill believes it is money well spent. “I definitely wouldn’t put my money in if I intended to lose it,” she said. But not every company has a clear mission, “amazing product” and a rabid fan base like OV. “It gives us a lot to work with,” she said.
Although there’s no time frame on when a new ceo will join, Merrill said the company is prepared to “take the time we need to find the right person” who has an understanding of “passion-led brands” and the skills to navigate the “challenge of a quickly scaling business.” Until that person comes on board, Merrill said she will “help to guide [Outdoor Voices] in the interim. I’m really optimistic about what the future holds.”
Los Angeles-based direct-to-consumer brand Lunya offers natural fiber, functional, fashionable sleepwear that is intended to help women feel both comfortable and confident.
Haney, who grew up a competitive athlete in Boulder, Colo., created Outdoor Voices in 2014 to offer women an alternative to the testosterone-charged messages of many major activewear brands. Since its founding, it has raised more than $64 million in funding from General Catalyst, Forerunner Ventures, GV and Drexler Ventures, the family investment firm of Mickey Drexler.
On Sunday, she told WWD: “We’ve got to master the rules to break them. We are focused on getting the right systems, processes, and ways of doing things in place so we have a strong foundation for growth. Ashley brings a lot of this knowledge and operational leadership. We are also focused on creating new, differentiated products that bring to life recreation in exciting and unique-to-OV ways.”
She also acknowledged that OV was “missing the right operational leader and lacked board alignment. Though public and painful, I see this time away from the company as a gift. Stepping out of day-to-day operations has allowed me to spend time with my family, look hard at things I would have done differently, and recharge my creative vision. In stepping back, I’ve been able to see what I’m best at and what I’m not. I am a creative leader and now know just how important a seasoned operator is to bringing this vision to life.”
Haney said she’s looking forward to “a successful chapter two” at Outdoor Voices. “I hope we are able to inspire through movement and make the most imaginative, cool, quality product for doing things. Now it’s all about execution. The vision for the brand is the same: to build the number-one recreation company and ‘Get the World Moving.’ However, the ‘how’ we get there has significantly changed — and for the better. Now it’s about bringing it to life as a healthy sustainable business that drives value for our customers, team, and shareholders. Ashley brings tremendous operational experience to the table with a talent for and understanding of product and brand. Now more than ever Outdoor Voices is positioned to have a major impact in inspiring people to move their bodies and minds. I am excited to have Ashley on Team OV and for this next chapter.”
Phillip Niels, who serves on the board and is also a partner at Oakwell Capital, welcomed Merrill to the company and said OV is “dedicated to our pursuit of freeing fitness from performance by making daily recreation fun and accessible to all, and we continue to make positive progress in growing and improving the business in a challenging retail environment.”
In addition to Merrill, Haney and Niels, the other board member is Peter Boyce 2nd of General Catalyst.