Aaron Luo, CEO, has more than 10 years of global managerial experience across corporate finance and operations with General Electric and is a serial entrepreneur within the fashion industry.
Carmen Chen Wu is a CFDA-‐award-‐winning American-‐Chinese handbag designer and the Creative Director of Caraa.
THE NEW HANDBAG THAT BRIDGES HIGH FASHION AND FUNCTIONALITY We recently met with Aaron Luo, the CEO of Caraa, a luxury athletic handbag brand based in New York City. The company’s first product is a bag that fits into the metropolitan’s woman’s wardrobe by bridging high fashion and functionality. Luo spent some time with us to tell us about the vision behind Caraa and how he sees the brand evolving in the future.
COMPANY BACKGROUND Caraa launched its first product, the Studio Bag, at the end of 2015 and has quickly followed up with a new edition, the Studio 2. The bags are priced at $395 and $350, respectively, which places them right in the middle of the accessible luxury handbag category dominated by brands such as Coach, Kate Spade, Michael Kors and Tory Burch.
Caraa’s big differentiating factor is its focus on fitness and performance, which makes it the first dedicated athleisure handbag brand. Since launching its first product, the company has placed its bags in Equinox, Peloton and Reebok fitness centers in New York and has developed its own e-‐commerce site, Caraasport.com.
THE ATHEISURE TREND Athleisure represents a big, and likely permanent, change in fashion. The term refers to athletic apparel and accessories that people can wear in nonathletic settings. The reasons for athleisure’s rising popularity are many, but the most obvious is that people are embracing healthier lifestyles, while also demanding more functionality from their wardrobes. Another factor is the casualization of the workplace: as Americans have become more casual in their attire, the athleisure category has grown.
The category’s early leaders have been sportswear companies Nike and Lululemon, but designer brands such as Rebecca Minkoff, Tory Burch and Derek Lam have all launched athleisure lines. Athleisurewear can also be found across brands and private labels at big department stores, such as Nordstrom and Kohl’s. The
product category most heavily influenced by athleisure so far has been apparel, while the accessories market now presents an ample growth opportunity.
According to research from Barclays, the US handbag and accessories market grew by 3% in 2015, reaching $11.7 billion. Michael Kors owned over 20% of the market, followed by Coach, Kate Spade and Tory Burch. Although Tory Burch launched Tory Sport, and Rebecca Minkoff made a foray into activewear and accessories in 2015, there has been a gap in the market for a product that combines fitness DNA with high-‐fashion appeal at an accessible price point. This is the space that Caraa wants to occupy.
CARAA: PRODUCT Caraa’s product is a luxury fitness bag and the team has spent time and effort thinking about the design in terms of functionality and appeal, as well as make. Caraa’s handbags incorporate high-‐performance and durable materials into a comfortable feel. The bags stand out by having air vents, moisture-‐wicking properties and compartments that fit women’s fitness gear as well as their daily essentials. In addition, the products offer the versatility of three different modes of wear: backpack, crossbody or satchel.
Source: Caraasport.com
Caraa positions itself as a brand that is devoted to helping its customer transition seamlessly throughout all of her daily activities without compromising function or style.
CARAA: EARLY TRACTION Caraa started off strong in 2016. Its product sold out in just two days at its largest distributer, Equinox, evidencing strong demand from fitness enthusiasts. Caraa’s team has also registered some quick wins on social media by ramping up to 6,099 followers on Instagram and 3,952 followers on Pinterest as of this writing, and by getting the backing of some up-‐and-‐coming NYC influencers.
Caraa has a strong sports focus, and has teamed up with distribution partners Equinox, Peloton and Reebok. Although these have been successful wholesale channels for the brand, according to Luo,
Caraa sees itself as a direct-‐to-‐consumer brand over the long term. The company’s target is to have 60% of sales coming from its own channels.
CARAA: FUTURE PLANS Caraa is on a growth trajectory. The team has been accepted into the new XRC Labs accelerator program in NYC and is currently raising seed funding. The team sees significant opportunities in the women’s and men’s activewear market as well as in the women’s travel market, and is planning to launch five new products over the course of 2016 and 2017.
WHAT WE THINK We really like the strong sports identity of the brand and its association with the fast-‐paced metropolitan lifestyle. In addition, Caraa is well aligned with the trends we are seeing in the market, such as growing demand for comfort and functionality and increasing reliance on influencers as a way to build brand awareness. The company offers an appealing product that can scale across customer segments and geographies. We believe the startup has a bright future, and we will follow its progress closely.
