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North Carolina Upstart Takes on Lululemon

Tickers in this article: FORR GPS LULU

CHARLOTTE ( TheStreet) -- When Lululemon Athletica (LULU) 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) 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.

The company carries roughly 120 activewear labels and thousands of styles, including boutique lines with names such as Prana, Alo , Zobha and Manduka alongside established outerwear names including Patagonia, O'Neill and Merrell.

Besides selection, the company wants to be known for giving customers sound guidance on choosing the merchandise best suited for their needs.

"A key point of customer service is the guidance," she says. "We want to be able to help our women customers make the right choice when it comes to apparel for the activities that she's in. We just want her to have the right choice at the right price point."

Woolman wouldn't release sales figures, but would say revenue leaped 400% last year. By April of 2012, the company had already surpassed that, with plenty of potential to grow, she says.

"I think we are in a unique position because we are independent. We're not just one brand. We're very objective and our customers knows we are unbiased. We can sell a customer" the product that's best suited for them, Woolman says. "Some of our brands, you can't find anywhere else."