For Kate Hudson, co-founding athleisure retailer Fabletics in 2013 has been a winning exercise on building a brand in a market already dominated by a slew of activewear powerhouses. To date, Fabletics, part of the e-commerce juggernaut TechStyle Fashion Group, has a $250 million revenue run rate, with sales increasing 43 percent in 2016.
In just four years Fabletics has more than 21 million followers on Twitter and has opened 18 retail stores. Despite some controversy over its VIP monthly membership model, Fabletics has attracted 1.2 million monthly members in eight countries, who receive discounts of up to 50 percent on apparel. Starting at $49, members receive a top, sports bra and bottoms based on their lifestyle and fashion preferences. The idea: to offer personalized service and on-trend fashion at half the price of competitors.
So how did she do it? While massive name recognition certainly helps, the Golden Globe–winning actress saw an opportunity: to adopt a Warby Parker e-commerce model and create an affordable, high-quality line that inspires all women — regardless of size, age or ability — to look and feel their best and embrace an active, healthy lifestyle.
Hudson's mission was further realized Monday, when Fabletics announced its expansion into plus sizes.
"When I started rapping about this idea, I got so passionate about it," said Hudson. "There wasn't a great-quality, affordable active-wear line. There were $250 yoga pants."
A growing trend
Athleisure apparel – casual clothing meant to be worn in the gym and around town — is a growing trend. According to research firm NDP Group, U.S. consumers spent $44 billion on activewear in 2016; Morgan Stanley predicts the sector will represent $83 billion in U.S. sales by 2020. Much of this is driven by millennials, who are more health conscious and have more relaxed standards when it comes to clothing, even in the workplace.
While Fabletics' lower price point sets it apart from companies like Nike, Under Armour, Lululemon and Athleta, discounters such as Target and Wal-Mart have recently entered the field, driving prices down. But Fabletics, like Amazon, is banking on its tech-centric DNA, using big data to track customers' buying preferences and even predicting future demand with great accuracy. (The company's most popular items are the Salar Capri and the Lisette high-waisted capri, said Hudson.)
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Fabletics also benefits from having TechStyle Fashion Group as its savvy parent. TechStyle is currently valued at more than $1 billion, making it part of the much-coveted unicorn club. Reuters, citing anonymous sources, is reporting that the company is on the block. (TechStyle declined to comment.)
Besides JustFab, TechStyle also owns other brands, like ShoeDazzle and FabKids. JustFab recently participated in Project Runway and is the exclusive accessories partner of the show.