The club was founded on 26 April 1903 as Athletic Club de Madrid by three Basque students living in Madrid. These founders saw the new club as a youth branch of their childhood team, Athletic Bilbao. In 1904, they were joined by dissident members of Real Madrid. They began playing in blue and white, the then colours of Athletic Bilbao, but by 1911, Athletic were playing in their current colours of red and white stripes. Some believe the change came about because red and white striped tops were the cheapest stripes to make, because the same combination was used to make bed mattresses, and the unused cloth was easily converted into football shirts. This contributed to the creation of the nickname, Los Colchoneros. However, another explanation is that both Athletic Bilbao and Athletic Madrid used to buy Blackburn Rovers‘ blue and white kits in England. In 1911, Juanito Elorduy, a former player and member of the board of Athletic Madrid, went to England to buy kits for both teams. When he failed to find Blackburn Rovers kits to purchase, he instead bought Southampton‘s red and white shirts. Athletic Madrid adopted the red and white shirt but opted to keep Blackburn Rovers’ blue shorts, leading to them also being known as Los Rojiblancos.
Source: Wikipedia