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Kate Hudson on how her personal brand led her to Fabletics

Nicole Sinclair
Markets Correspondent

At a time when much of retail is reporting lackluster numbers, one startup is boasting strong growth.

Fabletics, the athletic apparel company co-founded by Kate Hudson in 2013, has grown into a business with a $250 million revenue run rate.

And the rate of growth—and accompanying learning curve—have been “fast and furious,” according to Hudson. (She assured us she wasn’t plugging her stepfather’s upcoming movie).

Fabletics saw 46% global growth in 2016 and the company, which is part of TechStyle Fasion Group (formerly JustFab), benefited from online member loyalty and repeat purchases in particular.

Hudson is more than just the face of Fabletics; she’s intimately involved in the business.

“So many celebrities are just the face of a brand,” she told Yahoo Finance. “I am very involved in the company.” She added that she works closely with the marketing and creative teams. “I don’t mind being the smiley face as well,” she joked.

Kate Hudson speaks to Yahoo Finance’s Nicole Sinclair about her role as a business person and Fabletics (Yahoo Finance)

Hudson added that she cares deeply about the messaging and mission of the business. “I wanted to … be able to have a product that inspires a healthy lifestyle and to motivate women to take different steps in their lives … To maybe get a little bit healthier or to enjoy the lifestyle change of being healthy and getting involved in health and wellness,” she said.

As for her journey as a business woman? “At first it feels like you’re actually playing a character,” she said. “And then you realize that it just becomes this incredibly integrated part of your life. It’s been an interesting transition.”

There have been mixed reports as to what’s next for Fabletics—particularly after its parent company was valued at $1 billion in its latest funding round in 2014—but, for now, Hudson said she’s focusing on empowering women and helping the company grow.

Differentiating Fabletics

Fabletics is in a highly competitive field, where behemoths like Under Armour (UA) and Nike (NKE) and under-pressure Lululemon (LULU) dominate. Yet, Hudson said she sees her brand as unique. “I try not to think about competing and competitors,” she said.

Actress Kate Hudson, pictured here at the 89th Academy Awards Oscar Vanity Fair Party, is a fashion icon. She has put her interest in fashion to work in developing her athleisure brand “Fabletics” (REUTERS/Danny Moloshok)

“I think where the success has happened—what people are responding to—is our brand messaging,” Hudson added. “It’s not about driving this message of ‘be fit, be healthy, go hard.’ We’re like, let’s try to relax and have some fun … Which is kind of my perspective of life.”

Hudson added that Fabletics is anything but a traditional clothing company. “We didn’t start in retail,” she said. “We’re really in tech. We’re an e-commerce company.”

Membership model

Fabletics’ “VIP Membership” program has been an important focus for the company, building loyalty and allowing more affordable offerings because of customer predictability. Fabletics currently has 1.2 million active members, who receive a personalized “boutique” at the beginning of each month with new selections of styles. Members must check their boutiques by the fifth of every month and can choose to buy an item or skip the month. There’s no cost or obligation to buy, but if members don’t check the boutique, they still get charged $49.95, which works as a credit for Fabletics’ merchandise.

This model received some criticism for being confusing. In response, Hudson said the company took a step back to look at metrics and have doubled down on customer service outreach, including adding 24/7 customer service.

“I was really proud of what I saw, with our company reporting really strong customer service metrics,” she said. “There needed to be a quick turnaround.”

Kate Hudson speaks to Yahoo Finance’s Nicole Sinclair about her role as a business woman and Fabletics (Yahoo Finance)

Hudson emphasized that she feels strongly about keeping customers engaged in the brand, fostering engagement and community. In January, Fabletics announced access to exclusive digital workouts by top celebrity trainers. Hudson said her favorite workout is called plyojam. “I like to switch it up and have fun,” she said.

Nicole Sinclair is markets correspondent for Yahoo Finance.

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