• by Sarah Mahoney , Staff Writer, Yesterday

It’s not a great time to be in the apparel business, let alone trendy activewear. But even as once-beloved brands like Lululemon and Nike report major struggles in the U.S. and consumers curb their clothing purchases, Fabletics keeps growing: Sales rose 18% to top the $1 billion milestone last year. It’s doing so by expanding into new adjacencies, including a move into denim, along with a swimsuit expansion.

The secret? Continual innovation, informed by constant feedback from three million active customers, says Meera Bhatia, president of the California-based company. Even though the company has long since pivoted from the subscription-only model it used at launch back in 2013, “we listen to what those members are telling us, and what they ask for. That’s just how we work.”

Consumer requests, gathered on the data level but also in groups and constant one-on-one conversations, have steered the company. “More than 30% told us they’d be interested in buying denim from us," guiding that launch earlier this year, Bhatia tells Retail Insider. Consumers also wanted more in swimwear -- a famously difficult category for apparel manufacturers -- so Fabletics is unveiling an expanded collection of Yitty, its partnership with musician Lizzo. Clamoring customers also drove the brand’s 2023 decision to enter the medical scrubs business, which grew 50% last year.

Customer input is also steering the company in its fast-growing real-estate strategy, with more than 120 stores now open, and 40 more planned -- both in the U.S. and abroad -- for this year. Input also fueled three years of double-digit growth, and a 15% same-store sales gain last year.

Celebrities, particularly those with outsized influencer clout, are also part of the equation. Besides Lizzo, the company also has partnerships with Khloe Kardashian, Kevin Hart and Keke Palmer.

Customers are already sold on Fabletics' fit-and-fabric know-how, as well as its sunny color choices. (Black leggings may still dominate many yoga studios, but this brand plays the whole rainbow.)

The new Lizzo line, for example, boasts 25 unique styles in luxe fabrics offering various compression levels, from nearly naked bikinis to shaping one-pieces. Yitty promises choices that are “supportive for every body and every baddie.” Swim is a growing category, and its success last year brought enough feedback for the company to make a bigger splash this year, given the brand’s credibility in function and fashion.

“We’ve got so much expertise in activewear and shapewear, and Lizzo brings so much confidence and style and commitment to inclusivity, and that's what we want the collection to be,” Bhatia says. “She’s fun and relatable -- that’s a great face for us.” 

Why is Fabletics gaining, when others aren’t? “It ultimately comes down to offering an amazing product and amazing value, and that's what drives demand. That's what we focus on. That's what we obsess about every single day.”

Despite the macroeconomic trends pinching some competitors -- and helping lower-priced brands, including private-label collections from retailers like Target and Dick’s -- Bhatia says Fabletics has yet to see evidence of consumers cutting back on their spending. “But we certainly see a bit of an evolution. People aren't buying the same amount of traditional gym clothing that they used to. They're starting to think about ways to bring these clothes into all aspects of their lives.”

The brand’s founding principle -- “that we could bring fit, fashion and style together in a way that was affordable and accessible for everyone” -- still holds.” So far, its expansion has felt natural, even evolving into denim, which is its biggest leap into lifestyle apparel yet.

What’s next? Bhatia admits finding new categories to enter won’t go on forever. "I don't know,” she says. “Maybe we run out."