“Our peak revenue run rate in the first half of 2020 reached $54 million,” said L.A. Collective cofounder Karl Singer, who works alongside wife Jaynee. The duo expects to close the year with eight to 12 times the revenue growth rate of 2019.
L.A. Collective creates ath-leisure and activewear collections produced entirely in Los Angeles while partnering with public figures with a following, like TV personality Morgan Stewart (who has more than a million fans on Instagram).
“We increased our positions in materials, fabric, trim and other raw materials by 70 percent to be able to accelerate our production turn times and restocks,” continued Singer, who made new hires this year. “Using our domestic infrastructure [that] we have in Los Angeles with factories and operations, we have been able to take advantage of creating new collections on a three- to four-week cadence and restocking bestsellers within five days.”
“Our company was positioned perfectly to the new realities brought on by the pandemic [that] the world is facing,” added Jaynee. Apparel ranges in price between about $50 for tanks to around $100 for leggings or joggers, with $15 matching face masks. “Customers wanted activewear and loungewear while still staying fashionable for their in-home Zoom calls,” she said.
Lindsey Carter, creator of L.A.-based activewear label Set Active (which is also online and direct-to-consumer), agreed. “People crave clothes that feel as good as they look,” she said. Her sport bras and leggings, worn by Hailey Bieber, among others, cost around $50 and $70, respectively.
While part of production is in downtown L.A., Set Active’s exclusive, seamless “sculptflex” fabric is created in China, which was an issue when Chinese manufacturers closed “from the end of Q4 2019 through most of Q1 2020,” Carter said. The label was also affected by the shutdown in L.A. that followed.
Yet business has bounced back since June, after production resumed. Compared to 2019, average monthly sales have seen a 125 percent increase, and by the end of 2020, she foresees two to three times more in gross revenue.
Ath-leisure was valued at $155.2 billion in 2018 and is expected to reach about $257 billion by 2026, according to market research company Allied Market Research.
In California, the cannabis industry, too, is reportedly expected to grow. A Golden State, based in Redding, is on track to double its sales this year from 2019 and has “seen a 10 percent increase from Q1 to Q2 in 2020,” said cofounder and chief executive officer Nishant Reddy.
The brand offers largely organic, all-natural products. “It’s the highest quality, clean cannabis that you simply can buy,” said Reddy.
Priced on the higher end, between $70 and $80 per jar (one-eighth of an ounce), cannabis plants are watered with snowmelt from Mount Shasta and grown in soil made from coconut hulls. The company relies entirely on sustainable energy and has become carbon neutral with the help of nonprofit Cool Effect, which works with businesses to reduce and offset carbon emissions.
Found at cannabis retailers like MedMen, the brand plans to open a flagship in Redding this year, a dispensary with floor-to-ceiling windows that opens into its cultivation space.
“It truly is a farm-to-table experience for consumers, like going to your favorite wine tasting room in Napa Valley,” Reddy went on.
California recently unveiled marijuana tax revenue of $208.4 million in its second quarter this year (“not including tax revenue collected by each jurisdiction,” according to the California Department of Tax and Fee Administration), up from $205.9 million in the first quarter. Total revenue in the state is now at $1.45 billion, according to CDTFA.
There will likely be a surge of new brands and product lines in “comfort categories” in California, including “ath-leisure and cannabis,” as spending increases going into the holiday season, said retail and trend expert Jake Cohen, who’s head of product marketing at online marketing firm Klaviyo.
He added: “We’re starting to see inventory shortage issues come up and expect that to increase as demand for products increases.”