The DTC-only Californian activewear brand Fabletics is reaching the limits of organic growth in Europe. For the first time, it is looking for wholesale partnerships to keep increasing sales and brand awareness.
The Californian activewear brand Fabletics is indissociable from the meteoric rise of “athleisure.” When the actress Kate Hudson and others founded Fabletics in 2013, with the idea of combining sportswear and fashion, the US trend for athleisure was conquering the fashion world and catalyzing the fusion of fitness fashion and everyday clothing. This proximity to Hollywood and the California lifestyle is still the basis for the brand’s success today, as are fashionable, functional collections at affordable prices, with new styles coming onto the market every month. In addition, there is a unique distribution model, based on community, and a subscription model. However, what works well in the US is not so easy in Europe.
Subscription as a distribution model
Fabletics’ European distribution is done exclusively through direct-to-consumer (DTC) channels, with the same subscription model that has proven highly successful in the US. The idea is that only those who have registered as members and paid a not inconsiderable monthly fee can shop at the web store. In Germany this is currently €54.95. This payment is considered a deposit and deducted from actual purchases.
The main attraction of this system for customers is that membership entitles them to additional benefits, such as exclusive products and discounts. There is also a fitness app that provides customers with workouts, meditations and other content.
However, there is no obligation to make monthly purchases. Monthly subscription payments can be suspended as often as members like, as long as they remember to notify Fabletics by the fifth of each month. New styles and colors are released monthly as additional incentives to purchase.
Fabletics currently has more than 2.3 million members worldwide. “Membership is still a core part of the brand. But you can shop with us without being a member,” says Daniel Klarkowski, Vice President of Brand Marketing for Fabletics Europe. That’s because many customers, especially in Europe, are reluctant to make the commitment. “Germans are simply more cautious when it comes to new concepts.”
Strong growth and own-retail
Fabletics has been active in Europe since mid-2014. Having started in the UK, it now operates in nine European countries with national online stores. The eight others are Germany (the European headquarters are now in Berlin), France, Denmark, Sweden, Austria, Spain, the Netherlands and Belgium. “We are on a successful path globally, with a focus on North America and Europe, to take the brand to a billion in sales,” says Klarkowski. Fabletics does not release exact numbers. “Until the Covid pandemic, we were growing over 20 percent every year. During the pandemic, it was even stronger.” The company has entered the brick-and-mortar retail market in the US in recent years and now has about 100 monobrand stores.
Europe: starting with wholesale
However, despite the strong growth, Europe currently accounts for just under 10 percent of total revenue. The number of memberships in Europe is also in that range. To unlock this potential, Fabletics has now launched wholesale distribution in Europe.
“We know from research that we have a lot of brand awareness in Europe,” says Klarkowski. “But we believe there are too few natural opportunities for people to discover Fabletics by accident.” The only ways to get in touch are digital, which is not enough to build the trust needed for the subscription model and further organic growth.
The first collaborations are already in place – with multi-brand retailers such as Zalando and About You. From October to November, there was also a temporary shop-in-shop area at the Wöhrl sports store in Nuremberg. More collaborations are expected to follow. Fabletics’ first appearance at the ISPO Munich trade show, in December, is evidence of this. “There is interest from retailers,” says Klarkowski. “We see great potential in working with retailers and serving the wholesale market. Retailers also have high hopes for the brand, which uses brand ambassadors such as Kate Hudson or, more recently, Khloe Kardashian and actor Kevin Hart to promote and expand its reach.”
The company also plans to expand its own retail operations. So far, it has only had its own pop-ups in London and Berlin, which have since closed. “Next year, however, we plan to further expand our retail activities, especially in the DACH region,” says Klarkowski. “An important focus for the coming years is growth in the wholesale and retail sector.” Fabletics hopes this will account for 10 to 15 percent of sales in future.
