April 10, 2006
Yoga’s Growing US Popularity Attracts Cash
By Deborah Cohen
CHICAGO -- Yoga, the ancient practice of postures, breathing and meditation, is gaining a lot of attention from the material world that its serious practitioners are trying to escape.And no wonder. Americans who practice yoga are often well-educated, have higher-than-average household income, and are willing to spend a bit more on so-called "green" purchases seen as benefiting the environment or society.
"It's kind of growing out of the crunchy stage of yoga to the Starbucks stage," said Bill Harper, publisher of Yoga Journal. "From the videos and the clothes and the toe socks ... people are pursuing this market with a vengeance."
A glance through recent issues of his monthly magazine, whose readership has doubled in the past four years to 325,000, illustrates the point. There are four-color ads from the likes of Asics athletic shoes, Eileen Fisher apparel and Ford Motor Co.. Yoga Journal is now licensing a Russian edition and preparing to expand in other international markets.
Americans spend some $2.95 billion a year on yoga classes, equipment, clothing, vacations, videos and more, according to a study commissioned by the magazine, fueled in part by aging baby boomers seeking less aggressive ways to stay fit.
Roughly 16.5 million people were practicing yoga in the United States early last year, either in studios, gyms or at home, up 43 percent from 2002, the study found.
FLOODING THE MARKET
Established sellers of yoga gear such as Hugger Mugger and Gaiam Inc. have been flooded with competition in the market for yoga mats, incense, clothing and fancy accoutrements ranging from designer yoga bags to eye pillows.
Vancouver, British Columbia-based Lululemon Athletica, for one, has seen sales of its yoga apparel rise to $100 million since its Canadian entrepreneur Chip Wilson founded the company in 1998. Customers are snapping up its trendy pants and tops to wear to class, and increasingly, to the supermarket or out to dinner.
The company operates some 40 stores, predominantly in Canada. It counts Japan and Australia among its new markets, and has a newly tapped management team that includes Robert Meers, former CEO of athletic shoemaker Reebok, to help set up shop in the United States. This month, Lululemon's reach extended to the U.S. heartland, with the opening of a Chicago store.
"A lot of investors are being attracted to the trend," said Corey Mulloy, a 34-year-old general partner with Boston-based venture capital firm Highland Capital Partners. Highland has stakes in Lululemon and Yoga Works, a growing chain of studios that now boasts 14 locations in southern California and New York.
Corporate types have indeed latched on. Rob Wrubel and George Lichter, best known as the men behind the Internet site Ask Jeeves, in 2003 provided refinancing for Yoga Works, which was founded in the late '80s.
Philip Swain, a former executive with national health club operator the Sports Club Co., now heads the company, which puts an emphasis on high-quality instruction and has grown by consolidating existing studios.
Another expanding business, Exhale, markets itself as a "mindbodyspa," with tony locations in Los Angeles, New York and other urban areas that combine yoga classes with facials, massage and alternative treatments such as acupuncture.
It lists nationally recognized yoga instructor Shiva Rea as "creative yoga adviser" and has backing from private equity firm Brentwood Associates.
MARRYING PROFIT WITH PRACTICE
Some question how all the consumption is changing a discipline with a strong spiritual foundation.
"We've taken this ancient tradition, science, and art of yoga out of a culture and a religion and world view and we've tried to transplant to the other side of the planet," said Judith Hanson Lasater, a longtime yoga instructor and author who holds a doctorate in East West psychology. "I believe there's not a complete match up."
Even so, several entrepreneurs stressed that they are able to adhere to yoga's healing principles while also turning a profit.
"It's about beauty and ascetics, not about opulence," said Joan Barnes, the former CEO and founder of children's apparel chain Gymboree Corp., who runs a small chain called Yoga Studio in Northern California.
For Cyndi Lee, 52, founder and owner of New York's City's popular Om yoga center, the business remains a labor of love. Lee said she has turned down numerous buyout offers through the years, worried a loss of control could erode the sense of community she has helped to create.
"It's not like McDonald's; it's not like popping out a hamburger," Lee said. "I don't want to have to commodify it."