Inside Fabletics' European strategy: Executives talk wholesale growth and market challenges

Fabletics is continuing to grow its wholesale business alongside its core digital clothing subscription service. The US athleisure provider is focusing on retailers such as Peek&Cloppenburg. Partnerships with gyms and reality TV star Khloé Kardashian are also boosting the brand's visibility.

Mark Ralea, general manager of Fabletics Europe, and Thomas Fröhlke, vice president of wholesale Europe, explain in an interview how the business is performing, the company's plans for wholesale, and why German customers in particular are harder to convince of the subscription model.

Fabletics has focused more on wholesale business in Europe since your appointment, Mr Fröhlke. What is the current status and where is it heading?

Fröhlke: As a brand with a core direct-to-consumer model, we have taken the step to open up in order to reach more consumers and increase brand presence. This is best achieved with reliable retail partners, who provide a connection to the product and visibility beyond our own platforms. It also gives us access to markets where we have not previously had a presence with our own stores or websites.

We started with pop-ups at retailers like Wöhrl, Gigasport and Westwing, as well as with online partners such as Zalando, AboutYou and Next in the UK. For key accounts, we have added a sales team, attended trade fairs and opened a very representative showroom in Berlin. We also have strategic partnerships with Holmes Place [Editor's note: a British gym chain], where we can reach our exact target audience.

What does partnership with Holmes Place look like?

Fröhlke: All Holmes Place trainers are equipped with Fabletics. We have co-branding on the clothing and are therefore present in all 15 studios.

Ralea: Overall, we will further expand our collaboration with various gym chains, including digital gyms.

What were next steps to pursue your wholesale goals?

Fröhlke: We started by onboarding additional distribution partners. A new partner, who is responsible for Cyprus, Italy and Eastern Europe among others, covers a total of 12 countries. This goes hand in hand with our go-to-market strategy; launching in new markets; collaborative campaigns with partners; and deliveries of point-of-sale material to commercialise the collection.

The entire structure had to be developed from scratch. Looking back over the past two years, we have definitely been able to stabilise sales.

What does that mean in concrete terms?

Ralea: After Thomas joined us in 2023, the wholesale business accounted for 1 percent of sales in Europe in 2024. This year, we expect to reach 8 percent. For next year, we are targeting a share of 12 to 13 percent, which is a significant increase.

Of course, you also have to bear in mind that our core business is also growing. We therefore need to grow disproportionately faster in wholesale for its share to increase. The team is doing a very good job of this. In fact, Khloé Kardashian also helped us to open doors when we had our first discussions.

How did she help you?

Ralea: With a name like Khloé Kardashian as a brand ambassador, we not only reach more customers, but also attract the interest of wholesale partners. You can see this with another market player who also happens to have a Kardashian as its face. Without her, the brand would certainly not be listed where it is today.

Your core business is membership model. Can you give us some insights into it?

Ralea: That's right, we are not a classic direct-to-consumer brand. We have our membership model, which differs from other subscription models in the fashion sector, such as those for socks and boxer shorts, in that we do not compete with our wholesale partners.

Data we have from the UK shows that 10 percent of all people who know our brand would take out a subscription. This means we have a very clear customer group that we can serve with our model. The other 90 percent who know us would not buy the brand because of our subscription model.

How do you react to that?

Ralea: We try to educate people that our subscription model is not what they imagine and is actually quite simple. We understand, of course, that subscription models have had a very particular reputation, especially in Germany, ever since Jamba [Editor's note: a former brand for ringtone subscriptions,'Jamba Spar Abo', that faced controversy over subscription practices and claims of misleading advertising].

We will probably never have five to six million subscribers in Germany. That is why it is all the better to have wholesale partners. This is not just for us, but also for customers who want our products but not a subscription, and are prepared to pay the full price for them. This price difference, in turn, made it difficult for us to convince our partners to take us on at the beginning, because we are relatively inexpensive in the subscription model.

So are German customers particularly difficult to convince about subscriptions?

Ralea: Germany is by far one of the most difficult subscription markets. This is changing more and more with other subscriptions like Netflix, Apple Music and Spotify. In 2012/13, when I was managing a beauty box subscription, it was almost impossible to sell a subscription model in Germany. It took a lot of energy and time.

In addition, fashion as a subscription model is also rather unusual in this country. This is really different in the US. There, you can get everything on subscription, from the coffee shop around the corner to every supermarket. It takes a bit more educational work in Germany.

In which market does model work better?

Ralea: In Europe, the UK is by far our strongest market. It accounts for 50 percent of our total European sales. Then comes Germany with around 25 to 30 percent, followed by a little from France, Spain, Denmark, Austria and Sweden. Belgium, Luxembourg and the Netherlands are somewhat lagging behind.

Which customers opt for a subscription?

Ralea: They are very loyal customers. Customer data shows that they buy between 60 and 70 percent of their fashion items from us.

Is that more of a sporty type?

Ralea: Funnily enough, I was in Los Angeles just last week and you see people in sports outfits every day and no one in a suit. That's different in Germany. With the exception of Berlin, which is a very special fashion market, leggings are not yet your everyday companion.

Therefore, yes, in Europe and especially in Germany, it tends to be the sporty type. That is why the largest sizes, we go up to 4XL, especially a 4XL or a 3XL, are very underrepresented, also in terms of sales. Sizes S and M, on the other hand, are selling very well.

Do you see differences in other European markets?

Ralea: The UK is always a bit closer to the US, also in terms of trends. In London, you definitely see sportswear as part of everyday looks. We have seen this shift there and will gradually experience it in Germany as well. It will just take a little longer.

But you have also expanded range beyond classic sportswear.

Ralea: Of course, we are also changing as a brand. What started with leggings has gradually been expanded to include other items in the performance category. We now also offer products like teddy coats, which are perhaps not necessarily suitable for sports. [laughs]

We have now launched them again for the winter with Khloé Kardashian and they are selling really well. We are developing in the direction of an everyday look with a sporty background. Nevertheless, our clear focus is always on performance.

How do you assess consumer sentiment among European customers in this area?

Ralea: The shift is moving a little more towards personal leisure or performance wear that you can wear every day. This plays massively into our hands. If we look at our life cycle, we will grow significantly more next year, and even this year, than we did last year.

In 2025, we expect an increase of 6 to 7 percent compared to the previous year, depending of course on the important fourth quarter. This is where the membership model comes into play a little. We are coming from 2021, 22 and 23, when things could not have gone better. From the end of 2023 to the end of 2024, the focus was on stabilisation to avoid a decline in sales. Now we are back on a growth trajectory. We are very happy that we managed to come out of the Covid-19 period without seeing a massive dip, as many other brands have experienced.

Fabletics is also active with its own stores in physical retail in its home market. In Europe, you are not so present at moment…

Ralea: In the US, we have 120 stores. In Europe, we had two at one point: London and Berlin. We opened the Berlin store during Covid-19, but then closed it again in 2023 because the local retail market is not that easy. The London store, which opened as a pop-up, then had to close in 2024 because we did not receive a lease extension.

However, we will be opening a new flagship store in Berlin in 2026. We will also be reviewing other store locations and trying to open them. The UK is also a focus. We will also be opening our first stores with distribution partners in Italy and Eastern Europe relatively soon.

How many stores are you aiming for in the coming years?

Ralea: Our plan does not include 120 stores. In Europe, we want to have at least 15 to 20 brand stores step-by-step over the next two to three years and then gradually build on that.

Fröhlke: In addition, we will be present in five Galeria [a German department store chain, ed.] stores this year with a mix of shop-in-shops and soft shops. At these five locations, we have a total of nine of our own spaces for womenswear, menswear and combined.

From the first quarter of 2026, we will go live in 115 Peek & Cloppenburg Düsseldorf stores in Germany, Austria and Eastern Europe. These are really their most commercial doors and all the metropolitan stores.

You have only been present in Austrian retail since last year. How has the initial response been?

Fröhlke: The response was extremely positive on the whole. In Gigasport, we have a super strong partner and specialist in the sports segment whose locations are second to none. We will of course continue to work with them.

Overall, Austria is of course one of three core markets in the DACH segment [Editor's note: Germany, Austria and Switzerland] that we are keeping a close eye on. Then, of course, there is the collaboration with P&C, which means we will have good nationwide coverage.

Which other markets are you targeting?

Fröhlke: We have just added a new partner in Ireland who has also just opened. We will be implementing a nice concept in the sports environment there.

My list is very long. We are currently somewhat limited in terms of resources, but that will change from the third quarter with the new showroom in Berlin. We also have many opportunities in Scandinavia and the UK.

Is focus in wholesale on brick and mortar retail?

Fröhlke: It has to be a healthy mix. The retail part is an extremely important factor because we have superb quality and that is often simply not recognised online. So the 'touch and feel' and the 'experience' of the brand definitely have their advantages.

This article was translated to English using an AI tool.

FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@fashionunited.com