Online athleisure retailer Fabletics planning 100 more stores

Dive Brief:

Fabletics, the athleisure apparel company co-founded by actor Kate Hudson, has plans to open as many as 100 stores over the next three to five years, Forbes reports.
The retailer will open its seventh store in the Minneapolis-based Mall of America. This past summer, the company opened five stores in five malls operated by General Growth Properties and a sixth in Westfield’s new Village in Topanga mall in California.
Fabletics, owned by parent company JustFab, does well when its stores are close to athleisure retailers like Lululemon and Gap-owned Athleta, which offer similar apparel at higher price points, cofounder and co-CEO Adam Goldenberg told Forbes.

Dive Insight:

Fabletics is on a roll, adding physical stores to its subscription-based e-commerce model. That model, though, has garnered criticism from shoppers, who say that the company isn’t forthright about its monthly charges and makes it too difficult to opt out of unwanted charges or merchandise sales.

Two years ago, parent company JustFab settled with the Federal Trade Commission for more than $26 million in penalties for sales of a weight-loss powder that the FTC deemed were due to deceptive advertising.

Fabletics similarly follows a subscription model that continues to garner complaints from customers, despite what Goldberg says are efforts to be more transparent.

Complaints are now fewer, according to Goldberg, who told Forbes, “For us, five to 10 complaints is five to 10 too many, but in a typical month we’re sending out 800,000 items. Largely speaking, customers really like this program.”

Some 40% of Fabletics’ store sales are from existing subscribers who want to try apparel on in person, he told Forbes.

Fabletics “VIP members,” the chain’s name for its subscribers, receive a significant discount on clothing, but are subject to the retailer’s subscription model. Fabletics leggings that sell for $79.95 are $49.95 with a VIP membership, significantly lower than Lululemon leggings.

But the retailer’s social media sites are rife with complaints from customers finding it difficult to opt out of future purchases, and that could impede its store sales as more shoppers may resist the idea of subscribing to get those deep discounts.