Fabletics expands business model, opens retail outlets

Actress Kate Hudson’s athletic wear brand, Fabletics, shows fabulous growth. The online monthly subscription service for fashionable athletic wear opened its seventh bricks and mortar retail location at Minnesota’s Mall of America, Forbes reported in February 2016. Fabletics co-CEO Adam Goldenberg said the company set a goal of opening 75 to 100 stores during the next three to five years.

A visit to the Fabletics website lets shoppers find the value in VIP status. The price point rests about $10 below a Lululemon purchase if you’re a regular customer, but joining the VIP program nets you a hefty discount to Target level prices. Your first VIP outfit costs $25 – not item – outfit. Thereafter, every month, Fabletics ships you a new workout outfit for $49.95 tailored to your sports preferences. You can cancel shipment any month by logging on between the 1st and 5th and clicking a button. Fashion and athletic bloggers rave over the clothes, and the company fills about 800,000 orders per month, according to Goldenberg.

“Largely speaking, customers really like this program,” he said.

Read more:
A (Non-Sponsored) Fabletics Review
How Kate Hudson’s Fabletics Is Taking On Amazon

In Stores
The seven existing stores carry the same merchandise and function under the same discount model. You can pay full price, but sales associates encourage customers to join the VIP program. That nets customers the same discounts in the store. That discount can turn a $79.95 item into a $49.95 item.

“We want to completely mirror the stores to the online experience,” Goldenberg said in the Forbes interview.

Not a bad idea since Fabletics generated $150 million in 2015 revenue, mostly from its e-commerce business. Its online customers have flocked to the stores, accounting for about 40 percent of sales, so far. Shoppers cited wanting to try on an item before buying it as the big reason for making the trip to the bricks and mortar location.

A little healthy competition helps, too. Fabletics stores near an Athleta or a Lululemon store generate the best sales. Although the clothing at all three stores starts out at a similar price, the Fabletics subscription discount offer boosts its sales in the retail competition.

The discount idea came from Hudson, who saw a gap in women’s athletic wear, namely that quality workout gear didn’t come at an affordable price. The actress and mother, a champion of encouraging women to lead an active, healthy lifestyle, found a way to change that by partnering with Goldenberg and Fabletics co-CEO Don Ressler. Hudson actively promotes her brand, choosing her own favorite outfits each month and posting photos of herself wearing them to her Instagram.

Read More On: Mall Of America