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North Carolina Upstart Takes on Lululemon

CHARLOTTE ( TheStreet) -- When Lululemon Athletica (LULU - Get Report) brought the apparel of yogis and athletes to mainstream, fashion-conscious women, it opened the door for an explosion in the women's fitness wear industry.

Lululemon calls itself a "yoga-inspired athletic apparel company," creating "components for people to live long, healthy and fun lives" through athletic wear that uses performance-enhancing fabrics and functional designs.

Perhaps it was riding this wave that can explain the rapid success of ActivewearUSA, a 4-year-old e-commerce retailer selling only women's performance and fitness wear. Or perhaps it was simply the realization by founder and CEO Avi Woolman while contemplating life from the cobra position that with the Lululemons and Gap (GPS - Get Report) Athletas of the world succeeding in the bricks-and-mortar space, there was an opportunity to sell multiple brands of women's fitness clothes online.

Either way, ActivewearUSA is flourishing.

"This is no longer a niche that is only serving the 1%," says Woolman, a former software developer. "As enhanced design, performance fabric and fits become the norm for workout gear, women are tossing away their college sweats and upgrading to a trend-forward look for the gym. This is an explosive category that is going to see exponential growth in the coming years."

Yet there is a big difference between functional activewear and designer sportswear.

"Designer sportswear for me, it is like Estrada or Ralph Lauren. These are for me designer sportswear, which is not particularly functional, not a performance product -- it's more fashionable and stylish, but it's not activewear," Woolman says.

She acknowledges that the lines are blurring, though.

"Everyone sees this as basically a big market and they are redefining themselves as activewear brands just to be in the market. Activewear is not just yoga wear anymore. Companies are continuing to innovate and launch new performance products for working out," Woolman says.

ActivewearUSA is well positioned.

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