Two days ago, under the lingering jet stream of two fighter jets, 30,000 athletes charged downhill in one of history’s most grueling marathon courses.
If you haven’t guessed, I’m talking about the Boston Marathon.
If you are a runner, the name sends shivers down your spine. You’ve heard the harrowing tales of Heartbreak Hill. Perhaps you’ve experienced the triumphs and challenges of the hilly course firsthand.
Even if you aren’t a runner, you’re probably familiar with the event. You watched with the rest of the world as the city of Boston shook off the horrors of the 2013 Boston Marathon bombing and returned to cheer for the marathon’s thousands of participants.
It’s an event that transcends sport; it is life changing.
This year, I was one of the lucky runners participating.
Unfortunately for my wallet, I was also one of the runners who dropped major cash to get to the starting line.
In 2016, Time magazine estimated that the average Boston marathoner spends around $4,000 on their journey to marathon glory. This price doesn’t include the Adidas-produced, $115 commemorative jacket.
Since the 1980s, running has become an incredibly profitable industry, catapulting brands like Nike, Adidas, and Lululemon straight to riches.
Since running appeals to every age group, investors profit from marathon fever.
Running Is Free, the Gear Is Not.
Running shoes are one of the most expensive parts of the sport. Certain companies own the streets. You know their names: Nike, Asics, Brooks…
But the brand I’m watching is not a major name — at least not yet.
Hoka One One offers luxury, cushioned shoes that appeal to runners tackling long distances. This includes the marathon and the ultra marathon.
Now, the push to compete in longer distances isn’t new to the running scene, but it’s just reaching the mainstream. I have plenty of friends who have bypassed the marathon and tackled 30 milers and above.
Their brand of choice is quickly becoming Hoka One One.
Hoka One One, which most athletes call Hoka, has so far had a great run.
Since its 2009 introduction to the market, Hoka has earned shelf space at major retailers like Rei and Dick’s Sporting Goods.
Hoka quickly attracted major athletic ambassadors and has collaborated with upcoming brands, including Oiselle — Lululemon’s feisty competition.
Even with Hoka’s widespread commercial appeal, the brand is still niche, which means that now’s the time for investors to get in on its rise.
Sadly, you can’t invest in just the shoe brand — the small private company was acquired by Deckers Outdoor Corporation (NASDAQ: DECK). Decker also owns Ugg and Teva, two brands that force Decker to endure seasonal financial droughts.
But Hoka can fix that. Hoka sales rose 33% in 2016 alone and made Decker a pretty penny, even during the winter months.
Running waits for no season. Most marathoners are deep in training throughout winter.
You’ve probably heard of the other company I want to mention. In fact, you might still be kicking yourself over not buying it when it first hit markets.
Why Lululemon Is Queen
I want to mention a somewhat tarnished stock market star: Lululemon Athletica.
During Boston, I had 26.2 painful, hot miles to think, and I realized something. Outside of Adidas, the Boston Marathon sponsor, I saw more Lululemon than any other sports brand.
Every female runner seemed to have a piece. Even some guys were rocking it.
Many investors speculate that Lululemon has plateaued, especially in recent years after the company came under fire for bad marketing and fat shaming.
But I argue the opposite: Lulu is set to grow, not with its traditional yoga products, but with its running apparel.
Running has changed. We don’t run in off-brand sweatpants, and not everything has a Nike swoosh. We have entered an era of luxury running brands, and a new generation of runners is willing to pay for them.
There are an estimated 42 million runners in America, 18 million of whom are millennials. And millennials run differently from previous generations. Outside of a handful of competitive post-college athletes, most millennials run purely for their health.
They combine their health with everyday life, meaning they’re likely to go to Whole Foods in the same clothes they just ran five miles in. And the company that makes that possible while offering versatile, fashionable athletic wear is Lululemon.
Plus, Lulu is a lot cuter than stained sweatpants.
This loyal millennial market gives Lulu a leg up on the competition.
I saw this at the Boston Marathon Expo where Lulu was heavily present. The company peddled its products through a new campaign called #morethanmiles, its first running campaign.
And the line for its booth was out the door.
Running might be the yoga company’s saving grace, especially as millennials come into buying power.
This means there’s room for growth. Despite the market fear, Lulu is doing fine.
At the end of the day, running is one of the most rewarding — and expensive — activities a person can do. We’re looking at a new age where marathon running and luxury sportswear are commonplace.
I am keeping an eye on Decker and Lulu — both of which currently flood my closet.
Now, if you’ll excuse me, I have to ice both my knees.
