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Kate Hudson's Fabletics Betting Big On Physical Stores, Plans To Quadruple Number Of Locations

Activewear retailer Fabletics, best known as an online retailer, is planning to open 75 new brick-and-mortar locations in addition to its existing 25 stores. The brand was co-founded five years ago by actress Kate Hudson.

Actress Kate Hudson (center) in Fabletics gear

The new stores will be both in the United States and elsewhere, though a timetable for their opening has yet to be released.

Later this year, the company will open a store in Bellevue, Washington, that will feature a new design, such as a "leggings bar" and a "selfie wall" for pictures.

"We are a digitally native company, so we've been able to really understand our customers — what they want, where they reside," Kate Hudson told CNBC. "At a time when people are very nervous about retail, [our customers] still want the retail shopping experience."

The brand will try to take advantage of the fact that the activewear sector is a strong spot in the otherwise humdrum apparel and footwear market. In 2017, activewear sales were up about 8% compared with the year before, according to L2 Digital. Sales in the space also surpassed apparel and footwear sales, which were up about 2.5% each.

That said, wholesale revenue growth in activewear has been sluggish in recent years, meaning that increased revenues for the sector mostly depend on ramping up online sales, L2 Digital said in its Activewear U.S. 2018 report. That, or opening physical stores that shoppers want to go to.

The sector is quite competitive with the likes of Nike, Athleta, Lululemon and Outdoor Voices in the game. For its part, Fabletics says it has 1.4 million VIP members, with more than 25% joining the subscription program through a friend’s referral, Retail Dive reports. Building up its physical store count will boost its marketing and sales.

Subscription-based online shoe and apparel retailer JustFab Inc. co-CEOs Don Ressler and Adam Goldenberg launched Fabletics with Hudson to take advantage of a gap they perceived in the activewear marketplace. There were luxury brands, but none that offered stylish gear at a more accessible price point.