Retail

Where Fabletics Grows From Here

Fabletics, the activewear company founded by actress Kate Hudson, is a brand often associated with fitness (and fitness lovers), which is why it might be surprising to note that, in founding the firm, Hudson was thinking far more about lifestyle than fitness itself.

Women’s activewear brands have been a rapidly growing market segment for the last several years. The fitness wellness focus is great, according to Hudson, but perhaps a little intimidating for the moms in their 30s and 40s, who have become the brands core customer. Professional athletes are very inspiring, but most average people aren’t quite ready to go zero to 60 on a workout routine. People want to be fit, but not necessarily cross-train fit, Hudson notes told CNBC.

She said, “Sometimes, for an average woman or an everyday woman, or a soccer mom, or someone who doesn’t necessarily know how to get into the healthy lifestyle, it can be a little bit intimidating. So, I kind of wanted to create something that was more about a lifestyle than an actual fitness brand. And it seemed to really resonate.”

In fact, it’s resonated enough that Fabletics now pulls in annual revenues of $300 million-plus, and has started to develop an international following even expanding from its online origins into brick-and-mortar stores in select urban locations. The secret to that traction, Hudson noted, is that Fabletics literally just puts less fitness pressure on its shopper — and that resonates with consumers who aren’t looking to be stressed out by their wardrobe.

“I personally think that there wasn’t a company or brand that was taking the healthy lifestyle with a ‘more fun’ approach, that was more about like doing the best you can,” she said.

The Fabletics customer gets two options when it comes to buying on the site: They can shop à la carte retail or elect to subscribe as a VIP member for $49 per month. Those who shop à la carte can expect to pay as little as $30 or as much as $150, depending on what goods and outfits they are there to buy. Members are given a sign-up deal of two leggings for $24 — after that, their monthly membership charge can be used as a credit toward other purchases they make on the site (VIP’s also get discounted price offerings).

Even if customers don’t choose to join as members, the site does prompt them with a membership quiz to show them more customized offerings.

Hudson noted that the subscription model was eventually “incredibly successful” for Fabletics, but took time for the concept to catch-on with customers.

And the customers with whom it didn’t catch on have turned out to be a vocally dissatisfied group. One unhappy reporter from The Federalist referred to Fabletics as “A Costly Trap Of Spandex And Lies.” And though that is a rather hyperbolic headline, the post runs through most of the complaints that brand has endured — the prices are too high, the goods quality doesn’t justify the pricing, the subscription program is hard to navigate, doesn’t offer a full enough selection and is almost comically hard to end.

The article noted, “While on the phone with a customer service rep, he warns me that if I do this I WILL NEVER GET TO SIGN UP AGAIN — a pretty dramatic warning, considering that every other subscription-based service I’ve ever signed up for lets you cancel and re-sign up at a later time.”

Due to the customer service woes, particularly among those who have tried to cancel subscription because a common enough complaint, Fabletics has since announced it is currently heavily investing in building out and improving its customer service infrastructure.

“You always want to keep your customer — you’re not always going to keep every customer — but customer service is a huge part of us digitally native companies,” said Hudson. “You don’t get into a business to not have happy customers. You get into business, to make sure everyone’s happy.”

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