An iconic activewear brand worn by Hollywood celebrities including US model Gigi Hadid is shutting down after nearly 15 years. 

Melbourne-based company Tully Lou, founded in 2012, announced a closing-down sale on Monday, but left the door open for a potential return in the future.   

'Everything has to go,' the company wrote on Instagram. 

'This chapter is changing. Maybe this is a pause, maybe it's a reinvention, maybe we'll be back in a different way, but right now, we know one thing. 

'Everything has got to go.' 

Founders Sarah Pasini and Tully Humphrey previously hinted at tough times, with two years of challenging operations, longer production times and delivery delays. 

Ms Pasini told The Daily Telegraph there were multiple reasons why the decision was made to close down. 

'We made the tough decision to press pause on operations and really reassess how we can best serve the brand and our community,' she said. 

'So as much as I'd love to comment on the operational challenges, the truth is there is no one reason we've made this decision for now.

'I have had many conversations with friends in business across all fields, from hospitality to retail and there's an intense pressure everyone is feeling at the moment. 

'The common thing everyone is asking is: is it actually all worth it?'

The brand came to fame in 2014 when Hadid wore its mesh leggings and its items have also been worn by stars like Lucy Hale, Victoria's Secret model Devon Windsor, Kelly Osbourne and Vanessa Hudgens. 

The sports-luxe and activewear market was still in its early days when it first launched, something Ms Humphrey said she was proud of.  

'We are proud to be one of the first in this space,' she said.

'However, over the past two years, the reality of running a small business has become increasingly challenging.

'Rising freight costs, changing margins, increased operating expenses and a highly saturated market have created pressures that many small businesses are experiencing right now.'

Ms Humphrey said she hoped this was just a hiatus and that the brand would return in the future.

'This isn't a goodbye or permanent closure, it's simply a pause,' she said.

The pair also founded a vodcast and podcast production company, which has multiple programs including 'Shaped' hosted by former Richmond AFL premiership captain Trent Cotchin. 

'We have another media business Stitch Up, that is doing incredibly well and ultimately, we have had to consider how we show up for our amazing community and Tully Lou,' Ms Humphrey said. 

They also host a podcast called Curious Conversations that is produced by the media company.