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03/16/2016

CSA’s First-Ever Breakout Retailer Awards: A look at the winners

The retail industry is not lacking for new concepts — new players are constantly entering the market, both online and offline. But breaking through and establishing a record of success is another matter entirely. In this special section, Chain Store Age presents the winners of its first-ever Breakout Retailer Awards, brands that have crossed the “newbie” line and are on track for growth in the coming years.



Selected by the editorial board of CSA, the Breakout Retailer Awards honors emerging brands (less than 9 years old) that exhibit strong potential for growth and are innovating in their segment.



The freshman class is widely diverse. It cuts across categories to include an activewear brand with a high-fashion quotient, a specialty merchant that offers a brainy twist on games, a farmers market-styled grocer with mass appeal, and a fast-casual eatery bringing food customization to a new level.



But for all their differences, the four concepts are alike in their ability to engage and delight shoppers — online, in-store or both — whether it’s through an on-target product mix, a compelling value proposition, a dynamic and seamless multichannel experience or any combination thereof.



Learn more about the winners of the Breakout Retailers Awards, who are profiled in this special report, sponsored by Paint Folks.




Fabletics



Fabletics, the online fashion activewear brand co-founded by actress Kate Hudson, is flexing its muscle. The company is adding physical stores to its subscription-based e-commerce model and men’s workout gear to its mix.






















HQ

Los Angeles

Niche

Fashion-infused activewear at affordable prices

Footprint

Online, six stores

In the works

10 new stores in 2016

Launched online in 2013, Fabletics competes in the “athleisure” market, one of the apparel industry’s fastest-growing segments. Unlike such other activewear brands as Lululemon and Athletica, Fabletics’ offerings tend to have a higher fashion quotient and a decidedly lower price point, making it more accessible to a wider audience. And it has the unique advantage of having a high-profile spokesperson with a huge social media following as its celebrity co-founder.


“We believe we are the first true fashion athletic wear brand in the market today,” said Dustin Netral, VP retail operations, Fabletics, which is a subsidiary of JustFab, an online subscription-fashion company.


STORES: Fabletics made its store debut in fall 2015 and has opened six locations to date. Why did the brand, whose online business was growing at a fast clip, decide to make the leap to brick-and-mortar?


“We had overwhelming success with our e-commerce business, and we are always looking for ways to better serve our customers while growing our business,” Netral said. “The opening of our retail stores allowed us to serve a larger base of customers who prefer to touch and feel the product before making the purchase.”


The company has tested the physical space with stores that range from 1,400 sq. ft. to 2,200 sq. ft. Based on learnings and customer feedback, its store-of-the-future model is apt to be around 2,200 sq. ft. But the newly hatched brick-and-mortar retailer is not done experimenting.


“We will soon be testing a few locations that range in size from 2,500 sq. ft. to 2,700 sq. ft. as we continue to perfect the overall experience,” Netral said.


DESIGN: The experience includes an upbeat vibe and a modern, contemporary look. Fabletics stores combine the best of the online and physical worlds, with mobile points of sale, free shipping from warehouses for out-of-stock items, in-store fitting appointments, and a buy-online and pick-up in store service.


In addition, customers can take advantage of a virtual shopping cart to help them complete their shopping online at home and review their in-store purchases on the company’s website. They can also sign up for the company’s VIP membership (subscription) program, which offers a significant savings to members, Netral said.


“But we recognize that a membership program is not for everyone,” he added, “and our store environment is designed to serve the customer either way, as we believe our product is a great value even without the membership.”


Similar to some other retailers that have taken the plunge, Fabletics has found many synergies between the online and offline worlds. It has also found that customers who shop both channels have a higher purchase frequency, resulting in improved revenue.


“We believe that our customers deserve an agnostic experience with regard to the channel in which they are served,” Netral said, “and to achieve this, we have completely integrated the online and offline experience. We have built our own proprietary and fully mobile POS system that sits atop our e-commerce engine.”


The stores carry approximately 3,500 SKUs, including the brand’s new FL2 line for men, with the pieces all meant to transition from the gym to real life. New product is delivered every month to keep the fashions fresh and in season.


EXPANSION: In May, Fabletics will open its seventh store, at Mall of America, Bloomington, Minnesota. More are in the works. The company is “at lease” for an additional nine locations, and expects to activate another two to three this year.


“This will bring our year-end store count to approximately 18 locations, with many more opportunities over the next several years,“ Netral said.


“Finding the right location, in the right shopping area, with the right landlords will be the cornerstone of our expansion.”



Marbles: The Brain Store



Brain fitness might seem an unusual specialty for a retailer, but it’s proved a sweet spot for Marbles: The Brain Store.






















HQ

Baltimore

Niche

Brain fitness — games, puzzles, books, software and gadgets designed to strengthen and stimulate the brain

Footprint

Online, catalog and 35 stores

In the works

Increasing online capabilities, five new stores in 2016

Founded by Lindsay Gaskins and Scott Brown, the Chicago-based retailer sells games and other items designed to stimulate the brain. It made its debut in 2008, with a kiosk in a local mall. People were intrigued, but they wanted a more engaging shopping experience, said marketing director Hallie