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Digitally-native activewear startup Fabletics was founded in 2013
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Company has grown revenue 30% annually, now approaching $900 million and is profitable
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Employs a unique VIP membership model that is free with big discounts, other perks
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VIP program helps Fabletics command a loyal following and precise inventory forecasting
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Plans to double store count to 200 by 2030 including international additions
In the old days, apparel retailers had no choice but to make risky bets when it came to forecasting customer demand. But in the new age of digitally-native brands, the smartest players can lean on data from a new generation of loyalty programs to remove most of the guesswork – making both customers and investors happier.
One such company to watch is privately-held activewear pioneer Fabletics, which was founded in 2013 with a focus on fashion-forward designs and performance technology. The company is profitable and has grown to top line consistently at 30% annually, approaching $900 million in annual revenue. Success has been driven by strength in its core women’s division along with newer, high-growth categories such as men’s along with medical scrubs.
Fabletics, led by successful entrepreneur and CEO Adam Goldenberg, stands out as a company that cultivated a brand in a purely digital setting before opening its first physical store. Mr. Goldenberg brings a serious track record to the table: Working with Fabletics co-founder Don Ressler, he has generated over $10 billion in sales through TechStyle Fashion Group, which launched digitally native fashion brands Savage X Fenty, JustFab, ShoeDazzle, FabKids, and Yitty – in addition to Fabletics.
One unique feature of Fabletics is a membership model that benefits both the company and its customers. It’s free to be a VIP member, which includes benefits such as 20%-30% off all purchases, exclusive offerings, access to thousands of workouts on the FIT app and more. In return, the company gets to collect valuable data around sizes, frequency of purchases, and style preferences. Over 70 billion data records are processed annually with 80% of customers always shopping logged-in as members.
The VIP program not only creates loyalty and engagement, but precise inventory predictability. Fabletics boasts 95% accuracy in sizing and demand forecasting with inventory informed by member sizes and preferences. That translates to less than 1% inventory obsolescence and an industry-leading return and exchange rate of just 7%.
Fabletics also offers VIP members the chance to buy $100 in credits for only $59.95 each month, but it’s not required. Members can simply toggle the feature off at the start of any given month and won’t be charged but still enjoy all other VIP benefits.
