The direct-to-consumer landscape in retail

In 2019, DTC brands Casper, Away and Glossier were touting $1 billion-plus valuations, all of them reaching that threshold within five years of being founded. They were riding high on cheap capital, a strong economy and the hype the direct-to-consumer model had generated.

The next couple of years would see Casper go public, alongside retail darling Warby Parker and sustainable footwear brand Allbirds. At the same time, all three trumpeted big plans for brick-and-mortar footprints and category expansion, and touted the strength of the DTC model. 

It seemed DTC brands could do no wrong. Then, things changed.

Casper was sold to private equity just two years after it went public, Allbirds announced store closures and a shift to a “more profitable” distributor model globally, and Outdoor Voices abruptly shuttered its fleet of stores before being snapped up by the same firm that owns Draper James.

“Everyone believed the mantra should be DTC or die because they wanted to eliminate the middle person and make more money,” Simeon Siegel, managing director at BMO Capital Markets, said. “What they finally realized was: No one eliminates the middle person, they simply become the middle person, and that brings its own set of costs. So for a period of time, people became so obsessed with where they sell rather than what they sell that they lost track of who they were.”

Precipitous sales declines at former disruptors, including those buoyed by the pandemic like Peloton, became somewhat of a norm. The bike company and its peers also grew steadily more interested in other sales channels, including Amazon and more traditional wholesale partners. The more established brands that had jumped on board the DTC bandwagon when it was chugging along also began pulling back, recognizing some of the same challenges, and the allure of purely DTC brands faded.

“If Allbirds had remained on its strong growth trajectory, if Peloton had maintained the growth tear it was on, the models probably wouldn't have pivoted that much. But they did change — and both companies fell into difficulties,” GlobalData Managing Director Neil Saunders said, noting those challenges pushed both brands to expand their sales channels. “Now that genie has been let out of the bottle, it's not going to be put back in.”

Even brands like Lululemon, which sells mostly DTC, have wholesale accounts, Saunders noted. “The term DTC is still used as a shorthand. I'm just not quite sure it's all that relevant now,” he said.

Asked if we’ll still be talking about DTC brands in five years, Siegel put it more bluntly.

“In a derogatory, backwards-looking fashion? Sure.”

What went wrong

As the direct-to-consumer model matured, a slew of factors that helped DTC brands flourish began waning. The general retail market slowed, customer acquisition costs on social media surged, venture funds dried up, the cost to fulfill online orders grew and brands started hitting their own growth ceilings.

“There's a lot of things that moved and shifted in a relatively short period of time that meant that DTC went from being almost the darling or the hero of retail, to being a channel that had a lot of challenges and problems,” Saunders said. “And had a lot to prove that it wasn't necessarily, in some cases, proving.”

The model itself was flawed from the start, according to Siegel, whose firm has done multiple reports on the impact selling direct-to-consumer has on key metrics like gross margin. Critically, Siegel found that brands pivoting to direct did not see a relative increase in revenue, gross profit, gross margin, operating profit or operating margin.

“It just didn't happen. Back then, obviously, that was controversial — and it triggered a lot of fights,” Siegel said. “But now people are looking at the results and they're acknowledging wholesale, when done right, is truly a powerful thing.”

Some up-and-coming brands, including Vuori, may have dodged some of the growing pains in the sector by embracing wholesale from the start. Founder Joe Kudla has said before that the company saw a place for key wholesale partners from the beginning of its business and touted those relationships as part of the reason it was able to achieve profitability.

“The partners we selected at the start in the U.S., and those we work with today globally, are very intentionally picked, and our distribution is deliberately limited to only the best accounts,” Andy Lawrence, vice president of international at Vuori, said via email. “While I wouldn’t say wholesale insulates any brand from all DTC challenges, at Vuori, it does add a critical component to our success. Wholesale, if done correctly, allows brands like us to connect authentically with the local customer.”

Still, for a time many DTC brands simply didn’t invest in wholesale as a channel because selling directly to consumers was working. And investors were enthusiastic about funding DTC brands, profitability challenges or not, because capital was cheap and consumers had disposable income to spend on new brands and discretionary products.

“There was so much money sloshing around, it was very difficult to do badly,” Saunders said. 

But in a more discriminating market, the value proposition of some of retail’s startups became far more important — and was often found wanting. Expensive exercise bikes and fancy sheets are harder to sell in a more risk-averse economy.

“It's very important not to confuse problems with DTC — which, there are problems — with problems with the brand,” Saunders added. “Allbirds primarily has a brand problem. It doesn't really have a distribution problem, as such. So Allbirds could push itself into more stores, do more things — it's still not going to resolve the issues of the company because the problem is with the product and the position and the brand, it isn’t with the distribution method.”

As startups and traditional brands alike recognize the limits of DTC, many are embracing a more measured model that values both DTC and wholesale. The sensibility of that approach has been touted frequently over the past few years as brands have moved away from strictly digital approaches, with one report earlier this year saying wholesale is still the most profitable investment channel for brands.

Matt Katz, a managing partner at SSA & Company, describes what’s happening now as a “reset” driven by overinvestment in DTC and underinvestment in stores. The importance of stores and wholesale is now sending investments back in the other direction, and retailers are unlikely to lean back into DTC as hard as they did — that is, unless investors start funding it again.

“Silly as it sounds, people chase simplicity when it seems to be intuitive. This is not the first time, and it certainly will not be the last time, that everyone chased a buzzword,” Siegel said. “When companies don't need to be profitable, profit and loss statements are not scrutinized. When companies don't need to be profitable, expenses are not scrutinized. That makes it much easier to chase a hope and a belief versus being held accountable for the actual results.”

A reality check for DTC — and wholesale

The swing to DTC — and the correction since then — has taught both brands and wholesalers some important lessons. Take Nike, for example. The rise of DTC brands spurred a huge investment from the sportswear giant in its own digital capabilities and stores, and at the same time caused Nike to cut ties with a slew of wholesale partners it deemed less important to its overall strategy.

First, that led to exceptional growth. Then came a retraction, as Nike determined it had taken things too far and, in fact, did need those wholesale partners after all. Throw in layoffs, a cost-savings plan, a lawsuit surrounding the success of the DTC strategy and an abrupt CEO swap and you have a pretty good summary of the fallout to date.

“DTC serves a lot of Nike customers, but it doesn't serve all of Nike's customers. A lot of product discovery, a lot of buying of Nike products is done by people who might go into a department store, especially some of the older age cohorts,” Saunders said. “These people are not going to go online directly to Nike. They want to buy it through the channels that they shop in. And if Nike disappears or pulls back from some of these channels, they lose the sales — it's as simple as that. And they underestimated that. They were almost a little bit arrogant as to the power of the Nike brand.”

And make no mistake, Nike is a powerful brand. A $50 billion-a-year brand. 

But as Nike was learning its lessons, both good and bad, about DTC, its wholesale partners were also learning theirs. Foot Locker, one of the retailers Nike spurned and is now again seeking closer ties with, has unveiled its own turnaround actions to lure brands to its shelves, including revamping two-thirds of its Foot Locker and Kids Foot Locker stores over the next few years. Macy’s, too, which received similar treatment from Nike, has been undergoing store refreshes at its go-forward locations as it looks to keep customers and brand partners coming back.

“I think that the wholesale side really had to pull its socks up as well,” Saunders said, noting that retailers like Macy’s and Foot Locker have realized they are “serving two masters” now. “‘One of our masters is the consumer, but the other master is the brands. Because the brands don't have to be in our store necessarily and what we've got to prove to them is that we're a worthwhile partner.’”

Indeed, while the pendulum has swung back toward wholesale, some brands are still moving away from certain retailers and could continue to do so if their partners don’t serve them well. Levi’s in its Q3 earnings report touted that its wholesale business now makes up less than 20% of its revenue, down from 30% in 2015. Analysts at the time pointed to Levi’s sales and profit growth as a sign that its DTC strategy is working, at least for now.

“I think we've moved from retailers having the advantage. The retail-brand wholesale relationship used to be heavy, heavy retail. That was your point of distribution and the retailer chose which brands were most important, right?” Katz said. He noted that the balance shifted when brands developed their own access to customers through DTC. Now, Katz says, the consumer is in charge. “Consumers have taken over the leverage point and they are buying on availability and price and experience.” 

That means brands need to focus on being wherever the customer wants to buy, which might sometimes be wholesale and might sometimes be DTC and might sometimes be Amazon. 

During the height of DTC mania, companies like Nike and Adidas became very focused on what percentage of their revenue was DTC versus wholesale. Nike had a goal of upping DTC from 40% of its revenue to 60% by 2025, while Adidas aimed to reach a 50% DTC split by the same time period. Even with wholesale coming back in vogue, there is no universal answer for what that split should be, according to Siegel, and brands should be adjusting those percentages based on their individual needs.

Having a strong DTC business also doesn’t have to come at the expense of wholesale. For Vuori, having wholesale partners has helped it gain brand awareness in new markets like the U.K. and Japan.

“From that initial interaction, we then begin to see these newcomers start to interact and shop with us via our DTC channels too,” Lawrence said. “The omnichannel approach, including wholesale, is our best answer for how to expand in a profitable, brand accretive way.”

DTC and wholesale have different strengths, according to Siegel, with DTC theoretically offering first-party data, higher margins, greater control over the brand and greater connection to consumers, while wholesale ideally gives brands a partner with experience distributing products economically and efficiently.

“It became a battle,” Siegel said of how brands began approaching DTC and wholesale a few years ago. “It became a battle of players within the ecosystem — who could edge out their collaborator, as opposed to a holistic partnership where all sides could win.”

A case could be made that the battle is largely over now, with hybrid models being embraced across the industry and wholesale-brand relationships becoming more collaborative. But what does all this mean for future brands?

‘You should not aspire to be a DTC brand’

While most analysts agree that a hybrid model is the future, they also tend to agree that DTC will continue to be important for retail’s newest entrants. The channel is easy to set up and has lower initial costs, which makes it ideal for upstarts, but as the era of DTC brands fades, retail could also see more brands launching with partnerships already in place.

When Vanessa Hudgens relaunched her beauty brand Know Beauty, for example, she did so with Amazon. And beauty brand Pretty Smart entered the market through an exclusive deal with Walmart as well as its own website, even working with the mass merchant to develop its product line prior to launch.

“I think you'll see some of these brands may launch with very small strategic partnerships that give them their presence,” Katz said. “And if you can prove that the brand has staying power and pull, then you'll see continued investments in flagship real estate models.” 

That could range from pop-ups to permanent stores or limited geographic partnerships with retailers, Katz said, but regardless, there is likely to be a greater emphasis on how quickly a brand can grow its points of distribution. Some up-and-coming brands already offer prime examples of this: Actor Millie Bobby Brown launched her fashion brand at Nordstrom within months of its debut online.

While they took slightly longer to branch out, intimates brands Skims and Savage X Fenty have both also pursued wholesale relationships, including internationally, in addition to their DTC channels. Pursuing wholesale partnerships isn’t without its challenges, though, particularly for young brands.

“The problem with wholesale is you will go into a company and you will say to that company, ‘Look, I want you to stock our product’ and the first thing they will say is, ‘Our shelves are full,’” Saunders said. “So it's very difficult to break through. And then when you do break through, for a younger company, there are a lot of issues that you have to resolve. You have massive working capital requirements because if you're a brand-new brand and you're trying to get into a Walmart — even if Walmart agrees to take you into a fraction of the stores that they have — guess what? Your volume is terrific and most companies don't have the manufacturing capacity.”

The model of the future may look a lot more like that of running brands Hoka and On, which have both surged in popularity recently and have benefited from strong DTC sales and also a healthy presence in wholesale.

“You will get businesses that start off in both ways, but I think what is fortunate is … we've moved on from simply condemning a channel,” Siegel said. “There's no such thing as a bad channel. There are bad partnerships and there's bad execution.”

Another challenge for new brands, according to Saunders, is the simple fact that “there’s a lot of stuff out there” already. Any startups in retail now have to make it through a noisy landscape and offer a valuable enough proposition to gain shopper interest. Identifying as a “DTC brand” just doesn’t much matter anymore.

“We went through an era where companies identified themselves, and were known by others, by the outside world, based on where they sell, not what they sell. That's silly, right?” Siegel said. “Are you an apparel retailer? Are you a mattress retailer? Are you a connected fitness bike brand? Or are you a channel? … The idea of where you sell should always be a very important part of your business decision making. But it should not be who you are. You should not aspire to be a DTC brand. You should aspire to sell something special and figure out how to reach your consumer in the most economic, healthy, brand-appropriate way. I think, fortunately, we've moved a lot closer to that.”

What it takes for a brand to succeed — and survive — has changed drastically over the years. Gone are the days when brands could feasibly operate as pureplays. They must now continuously find ways to expand their distribution to reach customers.

Whether the brands are established or are still trying to get their footing, brick and mortar is becoming necessary in order to stand out in an increasingly crowded market. Several brands have forged wholesale deals with retailers to get their products in front of a new set of customers. 

ButcherBox, for example, launched in 2015 as an online subscription business. But at the start of 2026, the company, known for its meat and seafood offerings, kicked off its first major retail partnership with Target.

Others have taken a different approach, opting to build out their own fleet of stores or open store concepts within other retailers’ locations. Warby Parker, one of the most well-known names in the eyewear sector, last year formed a partnership with Target to launch shop-in-shops in some of the mass merchant’s stores.

But younger brands aren’t the only ones giving the industry something to talk about. More legacy brands and retailers are looking for ways to connect with new customers, notably by embarking on brick-and-mortar expansions.

While the industry has experienced a rough start to the year, with bankruptcy filings and layoff announcements, there are still retailers making major moves. Here are six brands to keep an eye on in 2026.

1. FP Movement

While FP Movement has been around for nearly 15 years, the brand has really made a name for itself in recent years.

The activewear label has been a bright spot for parent company Urban Outfitters, Inc., and CEO Dick Hayne in 2020 said FP Movement had “the potential to become a billion-dollar brand” and that the company “plan[s] to invest in its growth aggressively.”

The brand opened its first stand-alone store in late 2020 in Century City, California, and as of November 2025, FP Movement operated around 75 locations, with about 20 of those stores opening last year alone.

The brand has also strengthened wholesale relationships. FP Movement early last year announced a partnership with Nordstrom for a pop-up at the department store’s New York City flagship. The tie-up included fitness events, a Q&A speaker series and exclusive products from FP Movement’s latest collection.

The offshoot brand, which was established in 2012, has also posted strong financial results recently. In the third quarter, FP Movement experienced total growth of 18%, driven by retail comps increasing 4% and wholesale segment sales growing 29%.

“FP Movement had a spectacular quarter at wholesale this year. And we don't necessarily see that slowing down,” Sheila Harrington, global CEO of Urban Outfitters and Free People groups, said on an earnings call in November. “We see our specialty store business thriving as we specialize our product into the outdoor space, our studio space and the international opportunity we have with both [Free People and FP Movement] brands.”

2. Mango

Apparel retailer Mango is by no means emerging. The 40-plus-year-old company, however, is expanding — in a big way.

Two years ago, the company announced plans to open 500 new stores by 2026 across key markets like the U.S. Spain, France, Italy, India, the U.K. and Canada. 

Mango’s U.S. expansion plan kicked off in 2022 — 16 years after it entered the market — with the opening of its Fifth Avenue flagship in New York City. Mango now boasts around 65 stores in the U.S., including in Chicago, San Diego and Miami.

The region has become one of the company’s top-five markets, and the company said that by this year, it expects the region to become one of its top-three markets in terms of revenue.

Mango has expanded its reach online as well. The company opened a virtual store on Roblox in 2024, allowing users to buy digital clothing and products for their avatars. That same year, the brand announced plans to expand its e-commerce operations to 12 new markets — including Angola, Belize, Brunei, Gabon and New Zealand — bringing its international reach to over 120 markets.

The company has also been working to build out its assortment in the teen and home categories, with the retailer opening its first dedicated Mango Home store last year.

3. Tecovas

When Paul Hedrick founded western boot brand Tecovas in 2015, he was initially selling the boots out of his trunk wherever he could — farmers markets, his old elementary school’s holiday fair and other local fairs.

The brand opened its first store, in its hometown of Austin, Texas, in 2019 and has since expanded to around 55 locations.

Craftsmanship is at the heart of Tecovas, with each boot taking 200 steps by hand to make. 

The brand grew 70% year over year in 2021, driving it to seek out a retail veteran as it continues to scale.

In 2022, the brand appointed David Lafitte as CEO. Lafitte previously served as chief operating officer at Deckers Brands where he led operations across the company’s portfolio, which at the time included Hoka, Ugg, Teva and Sanuk.

Lafitte’s appointment followed other executive hires that year, including On Running veteran Gillian Kennedy as chief marketing officer; Orvis and Ralph Lauren vet Paul Choi as chief product officer; former Aldo executive Nathan Cray as chief supply chain officer; and Deckers vet Kim Heidt as senior vice president of retail.

4. Cyklar

Actress and YouTuber Claudia Sulewski in 2023 founded Cyklar, a genderless body care brand.

The brand says its products are “skincare-influenced,” as well as vegan, cruelty free, paraben free, gluten free and dermatologist tested.

“With Cyklar, my mission is to build a business that encourages you to give yourself an extra minute of time, to choose yourself, indulge in a small way — whenever your day allows for it,” Sulewski writes on the brand’s website. “Knowing how precious those few minutes are, it is my highest priority to create products that are worth it.  My hope is that Cyklar can help you feel balanced, confident in your skin and ready to show up as your best self.”

A year after its launch, Cyklar formed a strategic partnership with beauty accelerator The Center, which also houses fragrance brand Phlur, skin care brand Prequel, makeup brand Make Beauty and Iskra Lawrence-founded Saltair.

While the brand launched with a single product, the Body Cream, it has since expanded its assortment to include body washes, deodorants, perfume oil and more.

And earlier this month, Cyklar announced it would launch in Sephora, marking its first major prestige retail partner. Through the tie-up, the brand’s products will be added to Sephora’s website in late February and expand to about 450 of its stores by mid-March. The company said it is operationally ready to take on a wholesale partner of Sephora’s size, touting its hero SKUs, a robust supply chain and proven demand from customers.

"Cyklar was built intentionally — with our community, with formulation integrity, and with longevity in mind,” Sulewski said in a statement. “Sephora has always felt like the ultimate home for the brand. Their customer is skincare-first, ingredient-aware, fragrance-loving, and deeply routine-driven — exactly who Cyklar is for."

5. Homecourt

While Courteney Cox played Monica Geller on the popular television sitcom “Friends,” the character’s cleaning habits appear to extend offscreen for the actor. Cox in 2022 launched Homecourt, a home care brand.

“As a self-proclaimed neat freak, I’ve always loved the ritual of cleaning,” Cox said in a statement on the brand’s website. “I could never find products that smelled or looked as good as they worked, or anything that truly elevated homecare to what I’ve always felt it should be: an investment in yourself, your loved ones, and your daily sense of well-being.” 

Over the years, the brand has expanded beyond home care into new categories, like laundry and body care. It has also caught the attention of investors: In October, Homecourt secured $8 million in Series A funding led by Cult Capital. At the time, Homecourt said it would use the investment to build out its team, as well as grow its infrastructure and brand awareness.

The brand initially launched as a direct-to-consumer brand, but has steadily expanded its wholesale presence into more than 300 retail doors, including Bluemercury, Revolve and Nordstrom.

Homecourt’s growth comes as other celebrity-backed brands have been gaining momentum in recent years. Jennifer Aniston’s LolaVie hair care brand and Mindy Kaling’s Lion Pose skin care brand have forged retail partnerships, while Hailey Bieber’s Rhode was snapped up by E.l.f. Beauty for $1 billion.

6. Skims

Skims launched into the shapewear market in 2019 at a time when one name largely dominated the space.

Since then, the brand has expanded into other categories like loungewear and men’s, and inked a major deal to become the official underwear partner of the NBA, WNBA and USA Basketball.

And it doesn’t appear to be slowing down anytime soon.

Last year, Skims announced a partnership with Nike to launch a new brand, dubbed NikeSkims. After production delays, the brand officially launched in September with seven collections and nearly 60 styles.

And in November, Skims secured $225 million in a funding round led by Goldman Sachs Alternatives with participation from BDT & MSD Partners’ affiliated funds. The investment pushed the brand’s valuation to $5 billion. 

Skims said it planned to use the funding to fuel physical expansion and international growth. The brand opened its first permanent store in 2024 in Washington, D.C. and has expanded to other markets, including Los Angeles, Atlanta, Nashville, Chicago and Boca Raton, Florida.

Skims, which was on track to reach $1 billion in net sales in 2025, said it aims to become a predominantly physical business in the coming years.

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When Warby Parker launched as a digitally native brand 15 years ago, it quickly realized that it needed to find a way to help customers feel confident purchasing eyewear online.

Without physical stores, co-founders and co-CEOs Neil Blumenthal and Dave Gilboa sought to develop a way to allow consumers to try on its eyewear before making a purchase. While the executives initially invited customers into Blumenthal’s apartment — where the brand got its start — to try on its products and complete online orders, it needed a longer-term solution as the brand scaled. 

And so Warby Parker launched its popular home try-on program, where customers could have five frames shipped to their home to test out for free.

“We wanted to sort of overcome that challenge of buying without trying them on, and that is what led to the home try-on program, which is super innovative and novel,” Blumenthal said in an interview. 

But a lot has changed since the brand was founded in 2010. For one, Warby Parker has over 300 stores and is in almost every market across the country, according to Blumenthal. Technology has also come a long way in the last 15 years, making it easier for online shoppers to see how the glasses frames will fit through virtual try-on. 

That ultimately led to the brand’s decision to sunset its home try-on program at the end of 2025.

But as Warby Parker moves beyond that popular feature — which some consumers have closely associated with its shopping experience — the brand is ready for its next era.

A growing offline presence

Warby Parker opened its first permanent retail store in 2013, located in New York City. Over the years, the brand has grown its footprint nationwide and celebrated the opening of its 300th location in 2025.

The company has taken a “very deliberate and controlled” approach to its brick-and-mortar expansion, Blumenthal said, opening roughly 40 stores per year between 2022 and 2024. And executives in August said the brand is on track to open 45 stores this year.

“We believe in sustainable growth, which is steady and consistent growth over years and decades,” Blumenthal said. While Warby Parker has a sizable footprint compared to when it started — and compared to many other DTC brands that launched around the same time it did — executives have repeatedly said they see the potential for the company to operate at least 900 stores eventually. 

“Each year, we open up more stores than we did the previous year. So you should expect that ramp up to continue to accelerate,” Blumenthal added. “That way, we've hit that target in a thoughtful and sustainable manner.”

While Warby Parker initially disrupted the eyeglass market by promising to send glasses directly to customers via e-commerce, its stores have proven to be a valuable asset, according to Michael Brown, a partner and Americas retail leader at global consulting firm Kearney.

“Retailers have always needed a physical and a virtual presence,” Brown said. “If they were going to be an online store, they would be very, very capped in what their volume has been.”

Its store expansion has meant that most of the brand’s home try-on users live within 30 minutes of a Warby Parker store. That coupled with advancements in technology, including the brand’s own offerings, has led to the decision to end its home try-on service.

Mobile phone capabilities have become more advanced, helping to propel augmented reality and try-on tech’s usefulness. The company has also been working to integrate its in-store experience online. One way it’s tackling that is through Warby Parker’s Advisor tool, which it rolled out in the second quarter.

Advisor uses AI to provide a digitally guided experience to help customers select the frames that best suit their needs. Customers can access the Advisor feature within Warby Parker’s app and scan their face to get personalized recommendations based on their facial features, including shape, width and nose bridge, as well as their own style preferences.

“They've done a wonderful job developing virtual tools. You can look at almost any one of those frames on your face as if you were looking at it in a mirror,” Brown said. The brand’s virtual tech should be a “one-for-one replacement” for its home try-on program, he said, adding that “we're all becoming more used to doing things virtually without the physical product there.”

Warby Parker’s partnership with Target: ‘A very synergistic, accretive deal’

Warby Parker has expanded its distribution even further through a tie-up with Target that was announced in 2025.

The companies announced plans to open five Warby Parker shop-in-shops in the second half of this year, with the first stores opening in Willowbrook, Illinois, and Bloomington, Minnesota, over the summer. The shops, run by Warby Parker’s employees, will offer glasses, sunglasses and contacts, as well as eye exams and vision screenings. 

“When you're shopping in Target, you'll see a Warby Parker store. You'll literally cross that threshold and these stores look like any other Warby Parker store,” Blumenthal said.

But just months after Target and Warby Parker debuted their partnership, the mass merchant announced another would come to an end.

After about five years, Target and Ulta Beauty said their shop-in-shop concept would end by next August. But that doesn’t necessarily spell bad news for Warby Parker’s partnership with the mass merchant, according to Brown.

“Target is a great partner for anyone,” Brown said. “Target and Warby are going to cover a very, very wide spectrum of the population who has a need … I think it's a very synergistic, accretive deal for both of them.”

While Warby Parker operates in nearly every market across the country, Blumenthal doesn’t view it as a threat to the brand’s stand-alone stores.

“Most people need glasses within their lifetime, and the instance of refractive error is only increasing — unfortunately for humanity, but fortunately for our business,” Blumenthal said. “So we're not concerned about cannibalization. We're just focused on: How do we serve our customers as conveniently for them as possible?”

Kicking someone when they’re down is generally frowned upon, but what if it’s your biggest rival and the undisputed leader in the activewear space?

Since last year, Nike has been in the midst of a rare challenging period, brought on by a distribution strategy that swung too far toward DTC and an oversaturation of the sneaker market with classic styles. In its most recent fiscal year, Nike revenue declined 10%, dipping below $50 billion for the first time since 2022.

Adidas, meanwhile, has been on something of a heater. The activewear giant saw sales surge by double-digits in its most recent fiscal year and officially put the Yeezy fiasco to bed earlier this year. Even so, the retailer in 2024 made little more than half of Nike’s latest annual revenue.

Much of that blame can be laid at the feet of the North American market, where Adidas makes three times less than Nike. That region accounts for $13 billion of the nearly $19 billion total revenue difference between the rivals, at current exchange rates.

But Adidas has a plan — one that relies on being “more American.” The retailer is empowering its local teams to make strategy decisions, investing deeply in signing American athletes and pursuing a stronger presence in college athletics.

“It's the one thing that has held Adidas back here for a long, long time,” Matt Powell, a senior adviser with BCE Consulting who has worked with Adidas for 50 years, said. “If they just made product that was right for the U.S., they could be a whole lot bigger. And I think we're at the beginnings of that.”

The time seems ripe to make a play, but with Nike rebounding in its most recent quarter, is it already too late?

Tokyo, Taekwondo and the art of going low

Adidas is approaching its growth strategy with a healthy mix of optimism and realism. CEO Bjørn Gulden in July said the brand aims to be the market leader in all regions “except for North America,” but still intends to double its business in the area.

“We will not be number one in all markets, but our local leaders should have that ambition and identify what is necessary in terms of products, marketing, organization and resources to achieve this,” Gulden said in a statement in Q2 earnings.

When asked for an interview on Adidas’ opportunity in the U.S. and its local strategy, a company spokesperson directed Retail Dive to comments Gulden made on the brand’s Q2 earnings call. In those remarks, Gulden attributed the brand’s positive progress to the realization “that we need to be a global brand with a local mindset.”

“The markets are closest to the consumer, and they need to make sure that they run the business. And we, from global, then need to make sure that we have the best people hired and maintained in the markets, that we provide the frame, the systems, the innovation and the concepts,” Gulden said. “But we have to make sure that we make decisions as close as we can to the consumer, because the consumer in different parts of the world is behaving different, are being influenced by different things, and there are much bigger differences in the products than people think." 

Taking a more local approach to the U.S. is the right call, according to Powell, who also said Adidas North America President John Miller is the right person to lead that charge. Miller took on that position in 2024 and has more than a decade of experience at Nike and several years at Puma as well.

Fully erasing the deficit in North America may feel out of reach for now, but momentum is in Adidas’ favor. TD Cowen analysts in June noted that Nike’s market cap was just 2.2 times that of Adidas, almost the lowest in two decades. Over the past 10 years, Nike has averaged a 4 times multiple over its German rival, according to the analyst firm.

“Nike is unlikely to lose its #1 positioning in the market, but it is at risk of losing share to relevant competitors,” the analysts wrote, noting that Adidas and Nike tend to run countercyclical to each other.

In the same note, TD Cowen said Nike was losing share to the likes of On, Hoka and Brooks, while Adidas was riding the high of the low-profile trend. Adidas footwear styles like the Tokyo and the Taekwondo have propelled the brand to the front of consumers’ minds, and there’s still runway with those franchises. Powell said neither of those shoes have reached true commercial levels yet.

“They're not yet exploiting the buzz around those shoes — and I think when they get up to speed there, I think we'll see them come back to some nice growth,” Powell said.

That alone won’t be enough to maintain Adidas’ position in the market. The retailer will need to keep innovating and searching for whatever hits the cultural zeitgeist next — and be better-prepared to capitalize on it next time, Powell noted.

Adidas has other trends working in its favor right now as well, including performance footwear as fashion, retro styles and a new movement of women-led footwear trends that is driving the popularity of styles like Adidas’ Samba and Mexico. 

Now is a good time to pull ahead. Nike missed the boat on the low-profile trend, per Powell, and continues to grapple with the need to rightsize the Air Force 1, Air Jordan and Dunk shoe franchises.

These two retailers have been through a similar dance before. Needham analyst Tom Nikic told Retail Dive in June that Nike was similarly overindexed on Air Jordans eight or nine years ago after opening up the supply to “fight back against Adidas.”

Nike got out of that pickle by rightsizing the Jordan supply and rolling out collaborations with the likes of Off-White. A similar playbook will be needed now for Nike to regain some of its clout with shoppers, according to Nikic.

“Bjørn has been doing very well with that brand and I think it increases the degree of difficulty for Nike in terms of executing on the turnaround when you have Adidas doing well, New Balance doing well, Hoka and On doing well,” Nikic said in June.

Another potential boon to Adidas is the bridges Nike burned in wholesale, though the brand has since been working hard to mend its relationships with retail partners. While Foot Locker once ran a 75% Nike operation, that is unlikely to ever recur after the heavy losses Foot Locker suffered when Nike pulled back. Going forward, Foot Locker is likely to be more of a true house of brands, Nikic said, with a larger Adidas presence and more styles from smaller brands as well.

“They just prioritized their own stores and they didn't prioritize, say, Foot Locker, who reached out to other brands to fill the gap,” Barbara Kahn, a marketing professor at The Wharton School at the University of Pennsylvania, said. “That ended up hurting Nike a lot, because a lot of people were making decisions in these multibrand stores and Nikes just weren't on the shelves.”

You’ve got this, right? Or is winning not for everyone?

As the competition between Nike and Adidas sharpens in North America, there’s an interesting split happening in the way the two activewear giants market themselves to shoppers. Both retailers want to win, but the way they’re messaging that is vastly different. 

Last year, as part of a promise to reclaim “bolder” brand marketing, Nike released “Winning Isn’t for Everyone,” an ad that takes a ruthless approach to success. One visual leading up to the Summer Olympics showed NBA star Victor Wembanyama alongside the words “My Dream is to End Theirs.”

Several months later, Adidas rolled out “You Got This,” an ad that centers around the support and encouragement athletes receive from friends, family and teammates. The ads could hardly be more different in terms of tone — but that may not be a bad thing.

“I think their campaign makes perfect sense for them and I think it is differentiated from Nike, and that's good,” Kahn said of Adidas’ ad. “I don't think they should do what Nike is doing, and I don't think Nike should do what Adidas is doing. They just have different heritages and they're both going to play well if they can capitalize and build on their heritage.”

Adidas’ marketing mirrors the tone of some other European brands like Puma and On, which have taken more light-hearted approaches to athletics in recent ads, including a starring role for Sesame Street’s Elmo. The strategy is representative of a sense of belonging that’s popular with younger consumers these days, Powell said, but there is room for both approaches right now.

Some of the unapologetic messaging in Nike’s ads “is really Nike getting some of its swagger back that I think they lost during the Donahoe era,” Powell said regarding the former CEO. “To some extent, I think that marketing is aimed internally and to the industry as much as it is to the consumer.” 

Historically, Nike has also done its best when it’s had bold campaigns, according to Nikic, and it’s easier to revamp a marketing strategy than it is to bring new product to market. If Nike can prime its customer base with a series of attention-grabbing ads, that could go a long way toward getting their buy-in when innovative products do drop. 

More recent ad campaigns, like “Why Do It,” also take a step back from the swagger, which may be an acknowledgement of the need for both types of messaging. For Nike, it’s just important to return to being top-of-mind, according to Kahn.

Adidas has dipped into other marketing approaches as well. A recent Originals campaign touts the timelessness of the Superstar sneaker in an artsy campaign, though Powell says that silhouette is off-trend and shouldn’t be promoted as heavily as it is currently.

The skill with which Adidas and Nike are able to curry favor with North American consumers could be critical to how their rivalry plays out, especially in the next year or so as Nike potentially gears up for a comeback. The activewear giant’s revenue may have edged up 1% in its most recent quarter, but the brand is far from out of the woods yet — and that means there are a few potentially crucial quarters ahead for Adidas.

“I think Adidas can still do well here, whether or not Nike is healed,” Powell said. “It probably would have been easier when Nike was really in tough shape. But there's still runroom.”

While they may have gotten their starts online, most DTC brands will admit there’s merit in taking their brands offline.

A key reason is because consumers, particularly Gen Z shoppers, still like going into stores to see a product in person before purchasing.

Jewelry brand Mejuri, which was founded in 2013, started inviting its customers into its office two years after launching so they could touch and feel the merchandise. The brand, which officially opened its first store in 2018, now boasts a footprint of 55 locations.

“We assumed a lot of the people who were going to come to our stores were existing customers,” Noura Sakkijha, CEO and co-founder of Mejuri, said during a panel at NRF’s 2026 Big Show. “But to our surprise — and I'm glad that I was wrong — we found that 60% of the people buying in store are net new customers.”

The jewelry segment in particular skews heavily toward in-store purchases, with two out of every five transactions occurring in store, according to Sakkijha, further pushing the brand to embrace physical retail. 

Mejuri has been intentional in the details of its stores. In a nod to its early days of inviting customers into its office to see products, the brand designed its retail spaces to showcase its products without the glass-enclosed cases typically found in jewelry stores, encouraging them to pick up and look at the merchandise.

The brand has also found that the customer lifetime value is higher for individuals that shop in store versus online, Sakkijha said. “There is something about coming [in] and touching, feeling the products and really seeing the brand in real life that creates more loyalty.”

Beyond Yoga initially built a strong wholesale presence as a way to expand its distribution. But more recently, after Levi's acquired it in 2021, Beyond Yoga has worked to grow its store fleet.

“The customer is really craving that direct connection with the brand, and we see it across generations,” Katie Babineau, chief marketing officer at Beyond Yoga, said during the panel. 

The activewear brand opened its first permanent store in 2022, and last year doubled its store footprint, now boasting 14 locations, according to its website.

And seven-year-old diaper brand Coterie — which was acquired in October by Harry’s owner Mammoth Brands — has leaned into wholesale to reach new and existing customers. While the majority of its sales still come through its DTC channel, the brand currently sells through Wegmans, Whole Foods and Erewhon.

“Whole Foods is really working for us,” Coterie CEO Jess Jacobs said.

Coterie is responsible for 100% of the category growth in Whole Foods, is the No. 1 diaper brand selling there and is responsible for 86% of the grocery store’s diaper sales, Jacobs said.

The next chapter of Outdoor Voices has its founder back at the helm. 

After the brand abruptly shuttered its store footprint last year, Tyler Haney is back as the brand preps to drop a new collection. She will oversee product, brand, creative and community engagement “to help refocus OV’s brand identity and engage with new generations, as well as core consumers,” according to an emailed press release.

“We’re back, baby,” Haney says in a voiceover video detailing the history of Outdoor Voices. “I’m so excited to be reactivating this Doing Things mission.” 

The DTC activewear brand, which was acquired by Consortium Brand Partners a year ago, wiped its Instagram feed and now features just one video reintroducing founder, owner and partner Haney, who has spent the past nine months reimagining a collection for the brand.

That new line is expected to debut Aug. 4 for Haney’s Try Your Best community and Aug. 5 for everyone else. The brand’s website currently features a sign-up page to unlock first access to the launch, as well as the phrase, “Doing new things.”

Haney famously resigned from the DTC darling in 2020 amid financial challenges and reports of conflict between herself and retail magnate Mickey Drexler, who was then chairman of the board at Outdoor Voices. One New York Times article detailing the downfall of the brand cited an anonymous letter sent to the board that blamed Haney for seasoned executive departures and called her “spoiled” and mercurial, among other things. Haney at the time called out the stories that were circulating as one-sided. 

But it hasn’t been smooth sailing since 2020, either. Lunya founder Ashley Merrill took over as chairwoman of the brand that year with a mission to make it more profitable through an operations overhaul. But in 2022, reporting circulated that the company was looking to sell itself, and two years after that, the retailer was sparking bankruptcy speculation and shuttering its 15 stores.

That’s when Consortium Brand Partners scooped up the brand, placing it in a portfolio alongside Draper James and, as of this year, Jonathan Adler. Cory Baker, co-founder and managing partner of Consortium, told Retail Dive at the time that though stores would remain shuttered for now, it planned to open locations in the future, possibly in 2025. The executive also said that Outdoor Voices’ problems were fixable, and that the brand intended to expand into new categories, and enter wholesale and specialty stores.

“This initial collection will honor OV’s heritage and heart, while introducing fresh, innovative product designs that reaffirm the brand’s core ethos to new OV consumers and fans,” the company said in a release announcing the news.

In relaunching Outdoor Voices, Haney notes that she was “a lot younger” when she founded the company, calling herself “a baby girl” straight out of college. According to Haney, the retailer reassembled the original creative team and brought in some additional staff as well to help shape the first collection. She describes the new product as “fashion-y” and says it has a perspective, but it does take its cues from the original brand she founded.

“Over the last nine or so months, we’ve been working on the product — the uniform for doing things — and it has a lot of the same sensibility as original OV in terms of material meant to move, technically credible, functional,” Haney says in the video. “I think you’re really going to like it.”

While Stanley 1913 — and specifically its Quencher water bottle — may have experienced a strong surge of virality a few years ago, its leadership now feels the brand has moved beyond that flash-in-the-pan energy and into a more enduring place in the American psyche.

“Very early on we started talking about the Stanley lifestyle, ensuring that we're becoming a lifestyle brand and we're not just a hot cup company. ‘Hot cup company’ is really dangerous for brands,” Matt Navarro, global president of PMI WW Brands, which owns Stanley 1913, said in an interview. Stanley, he believes, has “pushed past that” marker. “Quencher is incredibly popular. It's still our best-selling product … but we certainly are still working really hard to make sure that around the world, frankly, we're looked at in many places in people's lives, not just the Quencher use case.”

It’s about time, too. Although Stanley earned a spot on Circana’s list of fastest-growing outdoor brands last year, chatter has already begun about its inevitable demise across a variety of social platforms. After all, wasn’t there the year of the Owala and the Hydro Flask as well?

Some research also points to fading interest in Stanley’s drinkware. In Piper Sandler’s most recent survey of teen shoppers, Stanley cups and tumblers were ranked as a top 5 fashion trend by female teens, next to the likes of Uggs and hoodies. However, those same water bottles were also listed as a top 5 fashion trend that’s on its way out, according to those same teens.

“It's much more than a viral moment,” Navarro said. “We're in year five of the virality and really turning to, how do we set this brand up for the next 100 years? Which for me is really rooted in: How do we create the Stanley lifestyle? And really, we call ourselves a lifestyle brand, but how do we make sure we show up to consumers that way?”

From Stanley cup to Stanley… cooler?

Navarro wasn’t sure about Stanley when he first saw a job opportunity there. Coming from Amer Sports, owner of Arc’teryx and Wilson Sporting Goods, he wanted something that was a closer match to his experience. But he warmed to the idea of “breathing life back into” a century-old brand that had gone quiet.

“The reality is nobody had heard from us in about 30 years,” Navarro said. 

Thus began an effort to modernize the brand and take advantage of white space in the market by leaning hard into hydration. That focus is representative of Stanley’s third “era,” in Navarro’s eyes, the first being as a provider of hot food and beverage storage for workers in the early 1900s and the second as it transformed into an outdoorsy brand around the ‘60s. With the brand’s newest era also came its crown-wearing, wing-toting mythical bear logo, inspired by the many tall tales of customer encounters with a bear and their Stanley.

“It was really finding the white space, I think, in that category that was being untapped around Gen Z, a more female consumer,” Navarro said of its current hydration era. “Also taking our product from utility more to like cultural icon and being part of your fashion, part of trend, part of lifestyle, connection to culture. Which, frankly, previous to 2020, nobody thought about water bottles that way. And today, people are every day matching them to outfits and prom dresses and fun things like that.”

The more intense of Stanley’s fan base collect the brand’s Quencher tumblers — and Stanley leans into that behavior with limited-edition colors and launches around holidays like Valentine’s Day and Mother’s Day. The retailer has partnerships with celebrities as far apart as Olivia Rodrigo and Lionel Messi, though Navarro stresses that the retailer looks for authentic fans of the brand to partner with in that way.

The goal? “To make sure we're right at the heart of culture, and I would say specifically youth culture,” Navarro said. “Now that we have that Stanley consumer, it's like, how do we meet them within more places throughout their lives?” 

That means not just leaning into the Quencher and handy accessories like straws, but building up hydration options for athletes, parents and others. The company’s IceFlow bottle franchise is also quite popular, according to Navarro, as are some of its storage options. And the retailer is looking at new categories as well. Coolers and “wearable water” are two of those opportunities Stanley plans to lean into.

Portable beveragewear as a category is on the rise, according to data from Circana. The segment grew 15% last year, reaching $3.1 billion, and is also generating sales at sporting goods retailers. According to the data firm, sporting goods companies saw sales of water bottles and other insulated containers grow 14% in 2024, on top of 38% growth the year prior.

“I actually think we've been able to be a disrupter in a space that had stayed a little stagnant for a while. I think we're pushing the envelope there,” Navarro said, calling its cross bottle the first nonround vacuum and “truly innovative” in the category. “We're learning as we go too, right? But it's super cool and fun to be doing something nobody's ever done before.” 

Material, color and finish can also be innovated further, according to Navarro, and that includes making them more sustainable. Most of the brand’s products use 90% or more recycled stainless steel and Stanley continues to be focused on eliminating single-use plastic.

Even if consumers in the U.S. begin to tire of the Stanley fandom, there’s still the rest of the world. Diversifying its shoppers to include global consumers is a “key part” of the brand’s strategy, and Stanley is already “growing really fast” in Europe, Asia and Australia, among other places. While Stanley has a global product range, the regions themselves can choose which items to sell that will have the most local relevance, and Stanley is pursuing partnerships and collaborations unique to those regions as well.

Of course, there’s a downside to all the popularity Stanley has accrued. Dupes of the real thing abound, from various online sites to products from its name-brand competitors created in response to the phenomenon. While frustrating, Navarro says it ultimately doesn’t impact the water bottle brand that much.

“People care a lot about the brand and the logo, and that's because we've curated this lifestyle and what we stand for,” Navarro said. “You can buy a Quencher without the Stanley logo on it from dozens and dozens of companies, but we're still No. 1 by a lot … [Shoppers] care about the brand and they connect the brand with their life and their lifestyle — and that's what really matters.”