It was a bit like Disneyland earlier this week at JustFab Inc.’s corporate offices in El Segundo, Calif.
Multiple tours for visitors to the space, now a little over a year-and-a-half old, were taking place simultaneously as the office buzzed with meetings and the roughly 400 workers there at a company that’s projecting to do $650 million in sales this year. JustFab Inc. more recently hired a corporate marketing officer — a new position — in Shawn Gold from storytelling platfrom Wattpad to oversee the individual marketing efforts of each of the portfolio brands — that is JustFab, Fabletics, FL2, ShoeDazzle and JustKids — and tie that all up with a nice bow on the corporate parent’s identity as it seeks to rename itself.
“We want a brand that reflects more of the company as a whole as we grow and acquire, potentially acquire, or start new brands,” Gold said. “We want something that reflects the ultimate mission of the company. We haven’t even fully decided on that name.”
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There’s plenty else that the company’s doing anyway. The namesake and largest of the brands JustFab soft-launched plus size and is testing that ahead of a full rollout. The $100 million ShoeDazzle business, because it shares some of the merchandise with JustFab, is also now dabbling with plus size. Personal styling services are being tested. The men’s FL2 brand, which began last year as an offshoot of Fabletics, is also getting retooled taking the data and learnings the company’s found since launch and iterating.
It’s growth projection takes revenue up about 29 percent from a year ago when it saw sales of $504 million and a $5 million loss. The company became profitable in the first quarter of this year.
JustFab Inc.’s raised about $300 million to date with an $85 million Series D round led by Passport Capital in 2014 that gave it a valuation of about $1 billion, thus fueling the question of whether an exit is now looming.
“We’re venture-invested and if the conditions are ripe, you know, in 2017 we would be open to [an initial public offering],” Gold said. “A lot has to happen. A lot has to happen now. So we’re favorably disposed to an IPO.”
Added vice president of global communications Kimberly Tobman: “It’s always a possibility at a company our size and with the money that we have invested into it. Of course the investors want some kind of strategic exit. That’s what the end goal is when you’re putting that kind of money into a business, but there’s no timeline, but it’s a very real possibility.”
Part of what brought Gold to the company is its growth story as a fashion tech company and the fact that they were a bit lacking in getting that across, he said.
“We just haven’t been telling the story,” he said. “They’ve just been building this business. They weren’t focusing. A lot of companies in our category have been mostly a lot of sizzle and less steak. And these guys were quite the opposite where they’re almost no sizzle. There was no b-to-b marketing.”
The company’s got a nice chunk of marketing change to work with: about $100 million in advertising across the portfolio. Most, about 40 percent is going to TV with the next largest bucket, 20 percent, spent on social. The spend is, of course not equally divided amongst the divisions. Most is going to JustFab and the less than three-year-old Fabletics line that’s now about $250 million in sales, positioning it close to JustFab in size and making it the company’s fastest-growing brand.
Much of the storytelling, at least consumer-facing at this point, is on the membership model that provides a consistent revenue stream from VIP members. The program has been called a scam by some who allege they were tricked into signing up for the membership. Gold said the company’s beefing up its explanations to ensure customers understand what they are signing up for before they buy to avoid surprises. Getting it right is key for the company with 80 percent of its sales from repeat buyers so it’s trying its hand at video explanations to ensure customers understand what they’re signing up for.
“People don’t get membership,” Gold said. “We are really aggressive in explaining membership, but still it’s a new model for some people. We deal with that in customer service and certainly we’ll refund people if they have certain issues, but ultimately if everyone is aware of how it works, it’s a win-win. It’s more like commitment commerce.”