Gymshark, a $500 Million D-to-c Brand, to Create Hundreds of Jobs
In an effort to build its burgeoning U.S. business, Gymshark has announced fulfillment expansion plans through its partnership with Radial.
Next month, a fulfillment center will open in Rialto, Calif., followed by one in Groveport, Ohio, in early August. Gymshark is exploring East Coast locations for other distribution centers to handle peak-volume sales, as the company continues to expand, according to general manager of North America Henry Spear.
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Gymshark founder Ben Francis was only 19, and was still working at Pizza Hut, when he started the company in the U.K. with a few friends in 2012. The direct-to-consumer performance-oriented fitness apparel brand has shoppers in more than 180 countries. In addition to its socially connected consumers, the brand has gotten a boost from unofficial supporters like Kendall Jenner.
”When I tell people that we are 100 percent e-commerce and we did over half a billion dollars last year [in sales], people are instantly surprised.” he said. “Ben, our founder, is relatively young, so we’re not very hierarchy-based. We really support this idea of best idea wins.”
To that end, the company makes sure that all employees have an opportunity to contribute regardless of titles or roles. Spear says, “[Gymshark feels] it’s more about, ‘How do you pump the market and create a great experience for the customer?’”
Globally, the company employs 550 people and that base is expected to increase significantly. Hundreds of new jobs are being created in Rialto and Groveport with the latter being a slightly larger facility, Spear said. Those two distribution centers will cover 780,000 square feet, said Spear, who noted Gymshark has “aggressive growth targets” for this year.
From the get-go, the company was started with a digital focus and staying in touch with its digitally native community has helped to “reach a market that maybe some of our legacy competitors aren’t playing in,” he said. “If you go on TikTok right now, we have more TikTok followers than Nike, Adidas, Under Armour, Lululemon. That is just aligned with the audience that we are going after, which is definitely a younger demographic.” Gymshark has 3.1 million TikTok followers.
Spear added, “Also, in the last year, a lot of fitness companies including us all [caught a] tailwind as people started to focus on wellbeing as a real priority compared to what they may have done previously. That has helped to catapult the growth this year.”
While Gymshark is growing quickly, breaking into the market of more established players and taking market share from heritage brands has been one of the challenges of the past year. In addition, the coronavirus crisis has made different elements of the global supply chain “very tough,” Spear said. Local supply chains have also been a factor, given the number of packages that are now “going through the courier system is so much more than FedEx, UPS and the U.S. Postal Service could have ever predicted,” Spear said. “Setting customer expectations and meeting those has been really tough sometimes for things that are out of our control.”
Francis started the company as a college student, using the money he earned delivering pizzas to buy a booth at a weightlifting expo to sell Gymshark products. That was a complete sellout, and since then the company has focused on strategic growth and maintaining “a focus on its community to keep catapulting that growth,” Spear said.
Acknowledging how the company’s Cinderella story has led to lasting power, he also said that, “having a relentless focus on the brand’s community and having the product to back it up,” as well as compelling price points, are key. New customer growth rates and retention rates are equally important.
The new distribution centers are geared for an anticipated uptick in sales, as well as a competitive edge: Gymshark expects to reach the majority of U.S. customers within three days.
Asked if Gymshark has been approached by other companies about an acquisition or to take it public, Spear said the company has chosen the private equity investor route. Last summer, the New York-based private equity firm General Atlantic, which also has an investment in Tory Burch, took a minority stake in Gymshark. “We’ve chosen that path for now in terms of taking outside capital, continuing to grow the business and mature the business as well,” he said.
The d-to-c company only offers sales twice a year — one around Black Friday and few days in June. “We typically don’t have things on discount. It’s a great way for people, who maybe have been thinking about the brand but haven’t tried it yet, to get in there at a cheaper proposition,” Spear noted.
Located 56 miles east of Los Angeles in San Bernardino County, Rialto is a city of 103,000 that is focused on economic development and job creation. Rialto has regained more than 70 percent of the jobs that were lost during the early months of the pandemic, according to the California Employment Development Department.
Opening freestanding stores is an option for the future, although there is nothing on the immediate horizon, with Spear noting that, “It’s something that we are investigating.”
Many of Gymshark’s sponsored athletes have engaged followings who want to meet them in person, so on occasion the company will organize an events for consumers to meet those individuals and to get some exclusive product. Boxer Ryan Garcia, bodybuilder and make fitness model Steve Cook, CrossFit competitor Noah Ohlsen and fitness influencer Whitney Simmons are among the brand’s better-known ambassadors. Jenner has been a fan of the brand but she is not an official ambassador, Spear said.
