Fullbeauty is an apparel company with a legacy that goes back over 120 years. Some of you may associate its original name, Lane Bryant, with a familiar retail footprint and a century old mail order catalog. The company was omni-channel long before we called it that and has always had a strong acquisition strategy. It includes the mail focused King Size brand and most recently Eloquii.
There are a lot of brands in the Fullbeauty portfolio, as well as two digital malls containing multiple brands aiming at different demographics. How do they all work and grow together? We want to explore this and other questions about the state of retail with Fullbeauty CEO, Jim Fogarty. You can listen to the entire podcast at this link.
MediaPost: This is a very complicated history of Fullbeauty, a lot of different brands, a lot of different acquisitions along the way. Give us the thumbnail?
Jim Fogarty: All of our brands are rooted in taking care of the woman who needs certain sizes, if you will, plus sizes, inclusive sizing. That's the brand DNA. Woman Within is the embodiment of the former Lane Bryant business. The Lane Bryant business was founded by a woman trying to bring inclusive sizing. [She] didn't think there was a lot of fashion available for women of her size, and so she just set about fixing it herself, and created a business proposition. That same business proposition was the founding story of the Catherine's brand, Eloquii, the Roaman’s brand. All of our brands had women founding brands to take care of a need based on the market to provide fashionable flattering clothing.
And so, when we step back and think about taking care of the market, we're now focusing on two main segments. Obviously, it's all taken care of plus women, but we're now trying to come at the market in two segments which is this this boomer and a young senior customer that we take care of in our classic mall, with brands like Woman Within, and Roaman’s and Catherine's and Jessica London. We have our new digital mall that's more focused on taking care of the Gen X and the older millennial customer, taking care of women who need these sizes, who don't have flattering clothing and taking care of it in two main demographics.
MP: Well, that raises a whole bunch of questions about brand strategy. Why so many brands? Why not consolidate? What does it serve to have so many discrete brands?
Fogarty: If I take you to the sort of classic model that's done a phenomenal job taken care of this boomer and young senior customer over the years, each brand serves a slightly different role. And we do get a lot of efficiencies in the back end of the business. But in terms of the front end commercially and taking care of the customer. The Woman Within brand is about her everyday basics. And then you'll have another brand in the portfolio, Jessica London, that'll skew more towards taking care of her wear to work needs. And then you'll have the Roaman’s brand, which will be a little bit more about going out in the evening, going out on the weekend and then Swimsuits for All would be obvious, takes care of her swim. Ellos is bringing Swedish fashion, European style to the plus woman. We've tried to be very careful about having each of the brands, and they're all led by separate leaders running each of these brands, and each is trying to take care of their lane. Some of it is a different customer, and some of it is taking care of the needs of the same customer.
And what you'll find in our portfolio is, we'll bring in a Woman Within customer, and then we'll turn her into a Roaman’s and a Jessica London customer. And we find that when we can get more of that total wallet share, we create a really strong customer with strong lifetime value. And that really is our model. And if you look at our digital mall, we'll bring in a woman into the Woman Within brand, and actually seeing the digital mall is just a very short, digital step over to Roaman’s and Jessica London. And that's free incremental digital marketing that we get by designing a network effect that we've designed into our portfolio.
MP: How much of the business is brick and mortar versus online? Because you have a fairly robust online sales organization, the company went to ecommerce two decades ago.
Fogarty: We're essentially zero brick and mortar. We have no stores whatsoever in the portfolio. Never say, never but we think a fundamental strength for us [is that] we don't have the capital expenditure requirements of the stores. It makes us much more flexible. When we hit the pandemic, and the business is super strong, we can scale up our marketing. Ads are working super. We buy more Facebook ads, Instagram ads, the money gets spent into Google, and we can scale up. You can't do that as effectively in brick and mortar. And then on the downside is super helpful as well because we're able to scale down when the business is tougher. We [had] brick and mortar before. There's a place for it, we came out of pandemic and brick and mortar was jumping. Of course, it’d be nice to have enjoyed that that jump, but we avoided the massive decline going into the pandemic by not having a brick and mortar. We're entirely driving our business direct-to-consumer.
MP: What's your marketing response in an environment like this? You start out by saying customer acquisition costs are very high right now, they've stayed high, and yet going through a challenging retail environment. What's your approach to marketing in this situation?
Fogarty: When we started hitting the tougher response rate times, the costs per visit were going up and the response rates were getting tougher. We went back to the well with the teams and tried to reposition for the moment. We've leaned very heavily into both targeted offers and very sharp offers. And we brought our price points down and our bargains down to make sure we continued to get customers in the door and to continue to find those new customers. And then, similarly, we needed to make the right kind of broad-based economics in our business. We weren't one of those businesses that right off after the pandemic took some huge margins hit because we were carrying a lot of excess inventory. We were able to keep the inventory position in check. We have a customer who knows what she likes and comes back with, we'll introduce new colors which come back to buy those same tried and true products on an ongoing basis, which is great. We were able to continue to deliver a strong margin. But then, as we tried to work on acquisition and reactivating customers, we went to sharper price points. And then, even with our existing customers we introduced sharper price points. Again, not across the board, but to make sure we continue to activate that customer, and that those parts worked out pretty well for us.
MP: Does that mean you’re changing your media allocation as well? Are you aiming those offers in different channels, or lower from mid to lower funnel, a little less on the top end?
Fogarty: We primarily try to drive last touch attribution. We give some credit for upper funnel but we're trying to make sure economically we're getting that customer, and so we've played around with multi-touch a little bit, but very much lean towards that last touch. Are we getting that customer to bring the order forth? And in playing to that we have had success leaning into those sharper price points and getting that last touch.
MP: Since you mentioned the two of your most recent acquisitions, what is the acquisition strategy? What are you looking for in companies, or how are you trying to use acquisition as both a way to expand your footprint, but also learn new skills?
Fogarty: When we started down this path, since I've been here, we’ve done the three acquisitions. We acquired Catherine's, and then we acquired Eloquii, and then Cuup. As we acquired Catherine's, that was a great example of another brand that was straight up into the demographic we were currently serving. It was a woman that was plus, but also extended plus sizes. We don't just handle plus size. We go all the way to a 44W. [Retailers] don't really go into that extended plus size range. We have one of the broadest if not the broadest offering of sizes out there. Catherine's was in that extended size business which for us is a super loyal customer, because just not enough people are taking care of that customer. We plug Catherine's in. And as I mentioned earlier, we got that digital marketing benefit. But that was in our current demographic, which was the sort of boomer, young, senior, and so, as we step back strategically, we looked at the total addressable market plus generally, and we thought we were doing a nice job in the boomer part, but we really didn't show up much in the younger millennial, Gen X demo.
Swimsuits For All, we owned [it] at the time, and they leaned into that demo a little bit. But we knew that the wrong way to do it would be to try to go younger. That's a kiss of death to me when a brand is trying to be something they're not. If somebody came along and said, I'm going to take Roaman’s and Jessica London, and then go younger with it, I've never seen that work in all my years of apparel, anyway. We need to either create a brand or buy into that segment. We needed an anchor tenant, if you will, of the strategy. And that became Eloquii. We found Eloquii and that was on our list of brands we thought would be great to acquire in that demographic. We were very excited when Walmart was changing their strategy on DTC. And it gave us that opportunity. And then, similarly Cuup came along, it fit that part of the addressable market that we're trying to go after, and it really is that simple. Addressable market, we were good on the top end, and we wanted to get much better on that that for younger end of the of the addressable market.