Back when Kate Hudson launched her athletic apparel brand Fabletics in 2013, she was, to many, yet another Hollywood actress trying to put her name on a brand. Hudson had become a fitness and wellness guru on Instagram. Millions of followers were eager to see her next cute workout outfit or exercise tip.
She launched Fabletics to capitalize on the “athleisure” trend. This fashion trend refers to wearing workout clothes as everyday wear. The look was starting to take off and Hudson herself was a fan. She aimed to create an online company that sold high-performance workout gear alongside cute and casual dresses and gym bags that have high-fashion style.
When Fabletics was finally launched four years ago, it implemented a unique shopping model. The subscription service model was just catching on and Hudson saw potential. In addition to customers being able to purchase Fabletics items on the website, they can sign up to become VIP members. When you become a VIP member, you receive a full workout outfit in the mail each month for a monthly fee of $49.95. Fabletics picks the outfit out for you based on a questionnaire that you fill out upon signing up. You can opt out at any time.
When Teri Hutcheon, blogger of afoodiestaysfit.com received her first workout outfit in the mail, she couldn’t believe the value of the VIP membership program. For $49.95, Teri got an entire outfit made with high-quality materials. Many competing athletic apparel companies charge that much for a single pair of leggings or a high-performance sports bra.
Today, Hudson’s company is worth over $250 million. The company earns more than Amazon’s athletic apparel department. To encourage more online sales, Hudson launched several brick-and-mortar Fabletics stores around the country to act as reverse showrooms.
The reverse showroom technique was made famous by Apple. Instead of using the stores to earn additional revenue, stores exist as a vehicle to get more customers to sign up to the VIP membership program. Customers who prefer to try on clothing in person before committing to a monthly fee can do so. About 25 percent of customers who enter a Fabletics store end up becoming VIP members before they walk out.
This unique concept proves that Hudson is a true entrepreneur at heart. Fabletics stores have earned the company more revenue and Hudson is planning to launch several more all over the world during the next five years.