In just four short years, movie star Kate Hudson has managed to turn her athletic apparel company Fabletics into a fashion business phenomenon. The company is currently valued at over $250 million and outperforms online retail giant Amazon’s fashion department.
Hudson launched Fabletics during the rise of the “athleisure” trend that incorporates workout apparel into everyday wear. For years before Hudson created Fabletics, she could be seen on her Instagram account wearing fashionable sports bras and leggings.
The Fabletics website offers hundreds of workout and athleisure apparel items. In addition to workout staples like supportive sports bras, leggings and jogger pants, shoppers can also browse through hundreds of everyday tank tops, dresses and jackets made of breathable, sweat-resistant fabrics. Like all online retail websites, the Fabletics website allows customers to add items to their shopping cart and check out.
However, Fabletics makes most of its revenue from its subscription service feature that allows customers to become VIP members. This membership program sends a full workout outfit to the subscriber’s door each month for a monthly fee of $49.95. The first outfit is half the price and the shipping is always free. Subscribers may opt out of the program at any time.
Fabletics selects the outfit for the subscriber based on a survey that subscribers take upon signing up. This survey asks the subscriber questions about their personal fashion style as well as the types of workouts that they like to do. VIP members love the convenience of letting Fabletics select the outfit for them.
When Joanie and Heather, the bloggers behind akrazycouponlady.com, signed up for the program, it was because they found the deal too hard to resist. As workout fanatics, they loved the idea of receiving a workout outfit each month for such an affordable price. When their first outfits arrived, they were very happy with the quality of Fabletics clothing.
To add to the company’s success, Hudson launched several “reverse showrooms” in the form of physical stores. While many physical stores are suffering because of the consumer shift to online retail, Fabletics stores help bring the company more revenue by encouraging customers to sign up for the VIP program. About 25 percent of customers who walk into a Fabletics store become VIP members. When customers try on a Fabletics clothing item, that item appears in the customer’s online shopping cart.
Thanks to Hudson’s innovative strategies, the company continues to grow. Hudson will be launching several more brick-and-mortar stores over the next several years.