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In the hip pocket: Wolaco reinvents active wear and pushes to challenge big sports apparel brands like Nike and Under Armour

  • With its specialized compression gear, Wolaco is addressing a common workout headache: Where do you store your keys and phone?
  • A slim pocket in Wolaco's workout gear lets the user run without worrying about storage.
WOLACO jostle-free compression shorts
Source: WOLACO
WOLACO jostle-free compression shorts

The Way of Life Athletic Company thinks it has a way to shake up the estimated $44 billion athleisure market, and to challenge the dominance of sportswear juggernauts like Nike and Under Armour.

The company, known as Wolaco, is growing a fan base by addressing a common problem for exercise buffs who wear skin-tight "compression gear" athletic clothing.

Specializing in men's athleisure, Wolaco makes shorts, hoodies and workout garb that come with slim, secure pockets to hold items like cellphones or keys. That way, the wearer doesn't have to worry about losing them.

Co-founder Terry White, who played lacrosse in college at Harvard, noted that athletes were in need of specially designed performance gear. The company has developed several products, including pants and hoodies, with what White calls a "hyper-focus" on comfort, durability and function.

"In my opinion, the most overlooked area of the athletic apparel market is the everyday person," the 28-year-old New Jersey native told CNBC in a recent interview. "We are interested in catering to the everyday consumer and how an active lifestyle fits into what you truly experience, instead of what professionals are wearing during primetime on game day."

'The only shorts you should wear'

Wilhelmina model and fitness coach Evan Betts.  He has been vital to the company’s marketing campaign in the athleisure space.
Source: WOLACO
Wilhelmina model and fitness coach Evan Betts. He has been vital to the company’s marketing campaign in the athleisure space.

Funded by a Kickstarter campaign three years ago that blew past a projected goal by about 400 percent, Wolaco has now rung up more than $1 million in revenue.

Its apparel has gotten high praise from its early adopters, such as former NFL running back Tony Richardson, who has been a supporter of the company since the beginning.

"These are the only shorts you should wear," the former New York Jet and three-time Pro-Bowler told CNBC.

A triathlon runner, Richardson spoke highly of Wolaco's design. "They allow you to keep things close, right at your hip. If I need to pull something out, it's right there," he said, speaking about the pocket built into its shorts.

To be sure, Wolaco is still a small fish in a very large pond dominated by the likes of Nike, Adidas and Under Armour. And its gear sells at a premium: Wolaco's compression shorts are $50, versus Under Armour's $14-35 and Nike's roughly $20.

It suggests the company is betting heavily on the quality and functionality of its apparel — and that consumers will be willing to fork extra cash to wear the Wolaco brand.

"Our loyal customer base, mostly comprised of millennials, has proven that they are willing to pay an incremental premium on a higher-quality product that is essential to their daily active routine," White told CNBC in an email.

He also mentioned Wolaco's use of "high quality" products, which are manufactured domestically.

"To command a higher price point, there needs to be perceived exclusivity, brand prestige, benefits or functionality that justifies the price," said Carol Roth, a CNBC contributor and small business expert.

"If they can do that, premium pricing is warranted. If not, customers— even if they buy once —won't buy again," she added.

The company is pinning its hopes on an internet-based strategy to build its brand and eat away at its competitors' market share — and has laid out an aggressive timetable to get to the next level.

"We have a 1-to-3-year window to capitalize on an online approach," White said, adding that Wolaco is burnishing a brand via its website, a growing presence on Amazon and social media.

"By leveraging social media and online advertising, we can claw at market share," he added.

Roth explained that for a relatively unknown name, "marketing is everything. You can have the best product in the world, and if nobody knows about it, you don't have a business," she said.

Conversely, Roth added, "you can have a marginal product that, if it has the right marketing, can endure for quite some time." For a start-up like Wolaco, "with the advantages of the web and social media, companies of all sizes can reach a target market fairly easily and cost-effectively."

Another regular user of Wolaco products is Evan Betts, a Wilhelmina model and fitness expert.

"There is something about Wolaco's construction that makes me feel like I can perform at my best," Betts told CNBC. "I believe they have the sustainability to go places."

The company manufactures its products domestically, allowing for quick turnaround on orders and an emphasis on oversight. Wolaco is also boosting its presence in brick-and-mortar retail with a physical location in New York, and will soon launch a women's line.

The road to success is paved with start-ups that tried to do too much or grew too fast as reality outstripped ambition. At least for now, White is confident that Wolaco's strategy can help launch it into the big leagues.

"Once you try it, it's pretty much impossible to go back," he said. Wolaco is "solving a very tangible problem, but we have only scratched the surface."