When Fabletics was launched in 2013 by movie star Kate Hudson, many questioned her business credentials. It’s not uncommon for celebrities to launch brands to earn some side income. However, Hudson has proven herself as a force to be reckoned with. The company is worth over $250 million today and Hudson continues to come up with innovative business strategies that earn her company more success. Today, Fabletics’ revenue beats that of e-commerce giant Amazon’s apparel department which is impressive to say the least.
It all started four years ago when Hudson wanted to launch an athletic apparel brand that reflected her own style. At the time, Hudson had already established herself as a fitness authority with millions of people following her on social media to read her workout and wellness tips.
Fabletics sells cute workout clothes that are made with high-quality materials. Sports bras and leggings are made with innovative sweat-resistant fabrics and the patterns and colors don’t fade or run in the wash. Blogger Teri Hutheon remarked on the quality of the clothes when she received her first order. After washing the clothes several times, they still look as good as new.
The company follows a unique subscription service model. Customers can sign up to become VIP members which allows them to receive a full workout outfit in the mail each month for $49.95. The outfits are selected by Fabletics based on a survey that is filled out upon signing up. The survey asks customers questions about their workout preferences and fashion tastes.
Bloggers Joanie and Heather loved the value and the convenience of the membership program. As fitness enthusiasts, they loved that Fabletics would do the hard work of picking out outfits for them. And, as VIP members, they pay less per item than they would if they purchased separate items directly on the company’s website.
Recently, Hudson has launched several brick-and-mortar stores across the country. They act as “reverse showrooms” that allow customers to see and feel Fabletics clothes in person before signing up for the VIP membership program. Each time that a customer tries an item on in the store, that item is added to their online shopping cart. About 25 percent of shoppers end up joining the VIP membership program before walking out of the store.
Thanks to the success of this strategy, Hudson is planning to launch several more stores over the next five years. As the company continues to grow, Hudson’s sense of innovation is evident.