Fabletics to Add 45 Stores in U.S. and Overseas in the Next Year

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The California-based activewear brand operates 135 stores globally and is about to enter India.

Fabletics has ambitious goals.

The El Segundo, Calif.-based company will significantly expand its retail footprint over the next year, adding 45 stores around the world.

Fabletics , which touts itself as the world’s largest digitally native activewear brand, operates 137 stores globally — 126 in the U.S. and 11 overseas. The plan is to triple its international footprint by opening about 20 stores over the next 12 months, along with 25 stores in the U.S. in the same time frame.

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Fabletics was founded as a women’s-only brand in 2013 in El Segundo, Calif., by Adam Goldenberg with Don and Ginger Ressler. It added menswear in 2020. Last year it revealed that it had surpassed $1 billion in net revenue and its goal is to double that number and quadruple its earnings before interest, taxes, depreciation and amortization within five years.

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Meera Bhatia, president of Fabletics, said the company is already well on its way.

“We have ambitious goals, but we are really tracking toward that,” she said. “We published [those numbers] last year and I can say, one year in, we are ahead of track. We continue to see really strong growth in our core business. We passed $1 billion in net revenue last year and this year, we’re growing double digits. So I feel really good that we are going to be able to meet that goal.”

A big part of meeting that goal lies with the store expansion.

“We’re building on three years of success in the United States,” Bhatia said, “where we’ve had double-digit same- store comp growth and we feel that puts us in a good place to start that international expansion and grow aggressively. So we’re excited to launch 45 new stores over the next year.”

The company operates in Mexico, Guatemala, Honduras, the Middle East, Peru, Uruguay and Colombia and is about to enter India. The new international stores will be located in those areas and will “take the same model as we’ve taken in the United States,” she said. That includes exploring the demographics of the general population and understanding the number of them interested in an active lifestyle.

Bhatia said that in each overseas market, Fabletics works with a local partner to find the locations, most of which will be situated in top malls with a lot of foot traffic.

“We focus on A-plus locations, no matter what market we’re in, and then it’s a matter of finding the right location, the right lease, etc. We’re pretty selective,” she said.

But she said the relationship with the local partner is neither a license nor a franchise. Instead, Fabletics designs and manufactures all of its product, and the local partner — which owns and operates the store — buys from the core line. “We’re partnering very closely with them on how we market, how we position the brand, etc.,” she said. “And it’s the same product that you would find in the United States.”

Although Fabletics has recently expanded into denim and also sells scrubs in the U.S., the international mix will stay focused on the women’s and men’s core active product. “We want to establish ourselves with the core active product first, so we’re starting with that,” she said.

In the States, “where we have an infrastructure and market expertise,” she added, Fabletics operates its own stores. She said the stores will be a mix of new markets along with existing ones where the brand does well and can accommodate additional stores.

“We sit in the middle of this value/style/fashion triangle and that applies both in urban and suburban locations,” she said, adding that most Fabletics stores are in enclosed or open-air malls rather than in street locations. “That reflects where we feel we’re stronger,” she said.

Bhatia declined to say how much of Fabletics’ business comes from physical retail versus e-commerce, adding that the company sees a lot of “cross-shopping. That’s one of the reasons we really love our physical retail business because it’s an acquisition channel. It’s how customers discover the brand. But then they shop online. Omnichannel shoppers are four-and-a-half times more valuable than a shopper who only shops one channel and that’s why we see this strategy of retail expansion as being very complimentary to the whole business.”

“Retail has become an increasingly important growth driver for our business,” added Goldenberg, who serves as chief executive officer of Fabletics. “As our retail model continues to deliver strong results in the U.S., we’re confident it can scale globally. This expansion will allow us to reach more customers, grow the Fabletics brand and create long-term value.”

With such ambitious growth plans, is an initial public offering in Fabletics’ future?

Bhatia laughed. “I can’t comment on that. But you know, I think right now we’re just really focused. And my personal goal every single day is to come in and continue to grow the strongest business, and build on the momentum we’ve had.”

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