How Fabletics Plans To Double Its Business In Three Years

August 2, 2018

Five years, 25 stores and 500 employees later, Fabletics is gearing up for its second phase of growth.

The athletic apparel brand, which is owned by TechStyle Fashion Group, sells leggings, workout tops, sports bras and, most recently, sneakers through a “VIP” membership model. With actress Kate Hudson as the brand’s creative director and the celebrity face of its TV ads, Fabletics has been the fastest-growing brand in the TechStyle stable, which includes other similarly modeled brands JustFab, Shoedazzle and FabKids, as well as Rihanna’s Savage x Fenty line. According to the company, it counts 1.4 million active members and $300 million in annual revenue, up from a reported 1.2 million members and $250 million in revenue at the same time last year. In 2017, TechStyle was valued at $1.5 billion.

Adam Goldenberg, the co-founder and co-CEO of Fabletics and TechStyle, wants to fast-track his biggest brand’s growth rate: His goal is to double Fabletics’ business over the next three years. To do that, Fabletics is speeding up and improving its design and merchandising strategy, plotting expansion in more countries, and opening 75 stores globally, bringing the total to 100 locations.

At the core of the store strategy is a new retail concept, the first of which will open this fall in Bellevue, Washington and include a cross-channel customer data platform (built in-house), a new point-of-sale system for employees, and a rethought merchandising strategy for leggings, the brand’s biggest product category.

“What, critically, hasn’t changed about the brand over the years is the membership model. That’s been the same since day one,” said Goldenberg. “Thanks to that model, we know so much about our customers — their sizes, fabric preferences, color preferences, workout habits. We also run everything in-house, which makes personalization, targeting and expansion much more high-touch.”

Fabletics’ membership model unlocks a consistent flow of customer data around product reviews, fit feedback, and browsing and purchasing behavior. It costs $49.95 per month to be a VIP member, which goes toward credits to purchase. By the fifth of every month, if m

“The closer the connection to the customer, the better, and that means the data relationship and the exchange of value between the brand and customer is at the center of the sustainability of growth,” said Chris Paradysz, founder of the digital marketing agency ForwardPMX. “The subscription model keeps a nice, tight grip on a customer-brand relationship, where both are accountable to the other. She gives information about fit and what’s important to her, and the brand responds.”

Read the whole story here in Glossy. 

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