Who knew you could find religion just by throwing open the doors to your closet? True Religion Apparel designs and markets upscale denimwear. The company's apparel offerings -- including jeans, skirts, jackets, and tops -- are sold under the True Religion Brand Jeans in major cities on six continents: Africa, Asia, Australia, Europe, and North and South America. It also markets swimwear, eyewear, footwear, and fragrances. True Religion Apparel peddles its pricey products through upscale retailers, such as Bloomingdales, Neiman Marcus, Saks Fifth Avenue, and some 700 high-end US boutiques. The company also operates about 100 US stores and 10 overseas under the True Religion banner, and sells apparel online.
The company's jeans, which account for about 70% of total sales, are priced from $168 to $376 per pair and are stitched together with fabrics from the US, Turkey, Japan, and Italy. Branding its products as "Made in the USA," True Religion outsources all of its production to contract manufacturers around the world. (Its men's and women's denimwear is sewn and finished by manufacturers in the US, its children's denim and fleece apparel are made in Mexico, and its knit shirts are made in the Far East.) To complete production, some apparel is then sent to laundry and finishing centers around Los Angeles.
Given the relatively high price points of its apparel, you'd expect sales to have suffered as a result of the global financial crisis, which depressed demand for luxury goods in many markets. However, True Religion Apparel's sales have more than doubled from about $173 million in 2007 to more than $363 million in 2010. Net sales climbed nearly 17% in 2010 vs. 2009 after rising by about 15% in the previous annual comparison. Sales at the company's US stores and online business jumped more than 46% in 2010 due to the addition of 24 new stores and a nearly 10% gain in same-store sales. The company attributed the strong same-store sales gain to its strategy of offering new styles regularly in its retail stores. The company's US wholesale business didn't fare as well, logging a 15% decline in 2010 vs. 2009, after falling nearly 20% in the previous annual comparison.
Sales outside the US rose by about 18% in 2010, driven by a new joint venture in Germany and the opening of stores in Cologne, London, Tokyo, and Toronto. In 2011 the apparel maker expects to add another 15 US stores and about 10 overseas. As demand from its wholesale department store customers falls, True Religion Apparel is looking to compensate by growing its own store network and online business.
True Religion Apparel was founded in 2002 by its chairman and CEO Jeffrey Lubell. Columbia Wanger Asset Management owns more than 10% of the company's shares. – less