Fabletics Bets on Denim as Athleisure Growth Slows

Fabletics Diversifies into Denim as Athleisure Momentum Cools

Athleisure giant Fabletics is expanding beyond its core activewear business with the launch of a denim collection this week, a move signaling a broader shift in consumer preferences and a slowdown in the once-booming athleisure market. The recent line, available online and in select retail locations, includes 11 styles for both men and women, priced between $79.95 and $174.95 depending on whether customers are members of Fabletics’ subscription program. This expansion comes as the company reported over $1 billion in revenue last year, but acknowledges a changing landscape where consumers are seeking a blend of comfort and more structured everyday wear.

Customer Demand Drives Denim Debut

According to Fabletics co-founder and CEO Adam Goldenberg, the decision to enter the denim market wasn’t a strategic pivot, but a direct response to customer feedback. “We’ve had over a million of our customers notify us that if Fabletics offered denim, they’d be highly interested in it,” Goldenberg told CNBC. The company began researching the denim category over two years ago, indicating a deliberate approach to entering a new market. This customer-driven strategy reflects a broader trend of companies adapting to evolving consumer tastes post-pandemic.

The Athleisure Shift and Market Data

The move into denim comes as the athleisure market experiences a deceleration in growth, particularly in North America. Market intelligence firm Euromonitor International projects the sports apparel market in North America to grow 2.3% in 2026, down from 3.1% between 2023 and 2024. Conversely, the denim market is expected to grow 2.1% this year, an increase from 0.7% during the same prior period. Globally, athleisure grew 2% last year, even as denim saw a 4% increase, according to data from GlobalData. These figures suggest a potential shift in consumer spending, with denim regaining traction as a casual staple.

Comfort Remains Key, Even as Dressing Up Returns

Fabletics isn’t abandoning athleisure, but rather adapting to a consumer who still prioritizes comfort even as they return to more structured clothing. Goldenberg explained that consumers are looking to “dress up more…in a way that feels fine and is more comfortable.” The company believes its denim line will cater to this demand by blending everyday style with comfortable fabrics. This strategy aligns with the broader trend of “hybrid” dressing, where consumers seek versatile clothing suitable for both work and leisure.

Competitive Landscape: Navigating Denim’s Volatility

Fabletics’ entry into the denim market places it alongside established players like Levi Strauss, American Eagle, and Gap. These companies have historically navigated the cyclical nature of denim trends, often diversifying into athleisure to mitigate risk. However, some companies, like Lululemon, have faced challenges expanding beyond their core offerings. Lululemon’s attempts to broaden its product range have been met with mixed reactions, with some critics suggesting it has alienated its core customer base. Nike, under former CEO John Donahoe, as well pursued a lifestyle and streetwear strategy that ultimately led to a decline in market share as the company lost focus on its performance-based athletic wear.

Scaling New Categories: Fabletics’ Track Record

Fabletics appears confident in its ability to successfully scale into new categories, citing its past successes. The company launched a men’s line in 2020, which now generates over $300 million in revenue, and its scrubs line has reached $75 million in sales in just over two years. Goldenberg emphasized the importance of an “and” approach – continuing to innovate in athleisure while simultaneously expanding into new areas. He believes this strategy will help the company achieve its five-year plan of doubling revenue and quadrupling profits.

Beyond Denim: Leveraging Category Expansion for Customer Acquisition

The company is already seeing the benefits of category expansion in terms of customer acquisition. Goldenberg noted that the scrubs line is bringing in thousands of new customers each month, with over 50% of those customers subsequently purchasing activewear within 90 days. This cross-selling effect demonstrates the potential of expanding into complementary categories to broaden Fabletics’ customer base and increase overall sales.

What’s Next for Fabletics

Fabletics plans to continue innovating within its core athleisure business while simultaneously expanding its denim line and exploring other potential categories. The company’s success will depend on its ability to maintain its focus on customer demand, adapt to evolving fashion trends, and effectively manage the challenges of scaling into new markets. The company has not provided specific guidance on projected denim sales, but will likely address performance during its next earnings call. Investors will be watching closely to see if the denim launch can help Fabletics sustain its growth trajectory in a changing retail landscape.