Activewear and accessories manufacturer Fabletics’ initial foray into retail stores has proven lucrative for online sales, and the company plans to expand this year.
“As we’ve opened these stores, we see that customers really like this omnichannel experience,” Fabletics president of retail Gregg Throgmartin told attendees at the annual eTail West conference in Palm Springs, Calif. “They’re not just shopping in one channel. They may want to go in the store, try it on, feel the fabric and then buy online that night.”
“The response has been good enough for us to want to crank out a lot more in 2016, ‘17 and beyond,” he says. “Our sales in the stores are great, but we also see a positive lift for our online business as well. It’s not something that we’ll disclose, but it’s been very positive.”
Fabletics, whose parent company JustFab Inc. is No. 98 in the Internet Retailer 2015 Top 500 Guide, announced plans to open five retail locations last summer. The retailer has since opened a sixth location and plans to open more, including one at the Mall of America.
Fabletics is on pace to do $250 million in online sales in 2016. While Throgmartin wouldn’t provide details about when or where Fabletics would open new retail locations, he did offer a glimpse into how he and his team determine which areas might be the best fit.
“It’s based on the online data and the data that we get from the malls and the properties and competitive data,” he says. “Some of it’s not that hard to figure out. You’ve got some megashopping areas in the U.S., like Cherry Creek in Denver and Mall of America. Mall of America gets over 40 million customers per year.”
Fabletics is one of a growing number of retailers that previously operated online only but expanded to physical retail locations where shoppers can take a closer look at products. Amazon.com Inc. (No. 1 in the Top 500) and jewelry retailer Blue Nile Inc. (No. 85) are examples.
Throgmartin says he expects more online-only retailers to follow that trend.
“What they’re recognizing is there is still a lot of customers that want that flexibility (to shop a brand both on and offline),” he says. “They may want to try the stuff on in the store and really feel the fabrics, and then take their time on the couch that night browsing what colors they want or what styles they want. The key is not trying to jam them down one path or the other.”
Adding physical retail locations isn’t the only change on tap for Fabletics.
Last year, the company expanded into men’s apparel and accessories. This year, Throgmartin says it will add swimwear and dresses. “The brand still has a long way to grow as far as category expansion,” he says. “This athleisure trend is absolutely on fire.”
During his keynote at eTail West on Wednesday, titled “The Best You’ll Ever Be is Average,” Throgmartin challenged retailers to look in the mirror to see where they can improve.
“Commit to regularly evaluating the process and be open to change,” he told attendees. “I would suggest to the retailers that you have a reverse scorecard to hold yourself accountable. If you are going to use the same providers as everybody else, are you going to use them better than everybody else?”