Kate Hudson's Fabletics Athleisure Line Plans to Open 75 New Stores in Global Push - Sachse Construction
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Kate Hudson’s Fabletics Athleisure Line Plans to Open 75 New Stores in Global Push

As Fabletics celebrates five years as a fashion brand in the athleisure industry — athletic wear designed for working out or running errands — it’s mapped out an aggressive growth strategy amid a competitive landscape that includes rivals Lululemon, Gap’s Athleta, Nike and Tory Burch Sport.

“We are a digitally native company, so we’ve been able to really understand our customers — what they want, where they reside,” co-founder and actress Kate Hudson told CNBC. “At a time when people are very nervous about retail, [our customers] still want the retail shopping experience.”

The privately held retailer, owned by ShoeDazzle and JustFab parent company TechStyle Fashion Group, is planning to open 75 new stores across the U.S. and overseas, bringing its total to 100. One of the stores slated for opening later this year in Bellevue, Washington, experiments with a new design, a high-tech payment processing system and other features, including a leggings bar and a selfie wall for photo-ops. A spokeswoman for the company declined to give a time frame for the rest of the store openings.

A company spokeswoman told CNBC it’s “rapidly surpassed $300 million in annual revenue” after just five years in business, while its current store base has achieved same-store sales growth of 20 percent year over year. It’s also managed to trim the time it takes to make and deliver its clothing from eight to six weeks.

The news comes amid increased competition in women’s athletic wear. Nike has promised to invest more in the women’s athletic apparel category, Gap is making a bigger push with its athleisure line Athleta (also opening new stores), and start-ups like Outdoor Voices and Alo Yoga aim to disrupt the industry for leggings and sports bras with fun patterns and motivational mantras.

Fabletics meanwhile is bulking up its leadership and design teams to take on its more-established rivals. A slew of recent hires include Karen Pornillos from yoga clothing pioneer Lululemon and Nancy Arnold from L Brands’ Victoria’s Secret.

Much of Fabletics’ success thus far — having drawn more than 1.4 million members to the platform — stems from its close ties with female celebrities who boast large fan followings. The company was co-founded in 2013 by Hudson, who starred in several hit movies, including “How To Lose a Guy in 10 Days” and “Bride Wars.” It recently enlisted singer-songwriter Demi Lovato as a brand ambassador.

“One thing I think any brand should do is have relationships with people who are fundamentally a great part of their message,” Hudson said. “Having Demi has been amazing. … She has brought a different demographic [of shopper] with her, and a new type of loyal customer.”

As it opens new stores in North America, Fabletics, which is based in El Segundo, California, is also looking to grow more aggressively globally. It currently has a presence in 10 countries, including the U.S.

This fall, the company is planning to open up stores for the first time in the Philippines, with other markets overseas being targeted in 2019.

“We’re looking at tier-A malls and lifestyle centers,” TechStyle co-CEO Adam Goldenberg told CNBC about Fabletics’ real estate strategy. “France is turning into a good market for us. We were almost too early [in expanding there], but now more and more countries are following suit.”

If it’s up to Hudson, she wants to reach as many women worldwide as possible with Fabletics’ body-positive messaging and quality product at a reasonable price. A VIP member can receive two pairs of leggings for $24, for example, compared with a pair of leggings at Lululemon that retail for $98.

“We’ve got a goal to double our revenue in the next three years,” Hudson said. “I work more on Fabletics now than I do on movies.”

It had been reported last year that TechStyle was exploring a sale. The company, which was reportedly working with J.P. Morgan Chase at the time, declined to comment to CNBC on any active discussions.

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