Gymshark, the fitness apparel brand: entering the premium market with record annual revenue of $5 billion

2024-04-03

Recently, British sports and fitness apparel brand Gymshark announced its latest financial results, the company's revenue in fiscal year 2023 increased by 15% to 556.2 million pounds (more than 5 billion yuan), a record high.

Gymshark said that rising raw material prices and increased labor and production costs have led to a decline in profits and consumer sentiment, but GymShark believes that the business will remain on an upward trend in the future. 2024, GymShark will continue to increase revenues through the launch of a new high-end product line, entry into the retail and wholesale markets, and other plans.

Gymshark CEO and founder Ben Francis said the upcoming premium line, Everywear, is the finest athleisure collection to date, and the products will only be available in the UK at upscale department store brand Selfridges, which represents GymShark's first foray into the wholesale retail market by broadening its sales channels from the original DTC.

According to Ben Francis, the company's founder of 93 years, Gymshark's revenues are at an ‘all-time high' and it has ambitious global expansion plans for 2024.

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The U.S. market grew 9.7% year-on-year to £250.4 million, making it the brand's number one market. Revenue in the UK region grew by 25.6% to £111.7 million and in Europe by 16.1% year-on-year to £129.4 million. Demand for sports and fitness apparel in Europe and the US continues to grow, which is in line with lululemon and alo yoga growth trends.

As a result, Gymshark is even bucking the market with new global growth plans. For example, Gymshark recently announced that it will develop its first high-end apparel line in partnership with Selfridges, a high-end department store in the U.K., and open a second brick-and-mortar store in London.2023, Gymshark opened its first flagship store in London's core shopping district, and sales have exceeded expectations.

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In 2012, Ben Francis, the 19-year-old founder, founded Gymshark while at university in the UK, initially made two fitness and sports tracking apps, due to the low profit margins they decided to switch to the apparel industry soon after, so in 2012 the Gymshark brand was born.

In 2020, the company closed a $300 million round of financing and entered the fast lane of growth. Even though it experienced an epidemic afterward, Gymshark's revenue has been growing steadily. Until the layoff crisis of '23, Gymshark could be considered smooth sailing.

But the company started low and went high in 2023, or still telling the sports shoes and apparel market: the growth of global sportswear, still worth looking forward to.

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In the case of lululemon, revenues rose 19% year-over-year to $2.2 billion in the third quarter of 2023, with operating revenues in China jumping 53% year-over-year and even 61% in the second quarter. And alo yoga's revenue exceeded $1 billion as early as 2022, and the yoga brand newcomer was valued at $10 billion in its latest round of funding at the end of 2023.

As a result, Gymshark has made a big push into women's tights, launching a high-end line and opening stores in core shopping districts to go after the high-end fitness yoga apparel segment where lululemon and alo are located.

Gymshark, with $5 billion in revenue, is going after lululemon after the founder's '2024 Year of Maximum Expansion' plan issued in 1993.

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Recently, Nike continued to launch the Nike Zenvy collection and made an effort in the field of yoga apparel. NIKE WOMEN held the "Starting from Pleasure" experience activity, through multi-sensory experience, to let everyone have a deep feeling of how Nike can support women's whole body and mind health through exercise, positive thinking, nutrition, rest, connection and other important contents, and hope that the new year together to the pleasure of the development. We hope that the new year will be a year of pleasure.

On the other hand, Li Ning has tried to compete in this market segment through an exclusive cooperation model. 1882 founded in New York, the Danskin brand is famous for its fashionable fitness products based on professional dance and yoga. Li Ning exclusively operates the Danskin brand in mainland China and Macau.

Anta, on the other hand, announced the acquisition of domestic women's sports brand MAIA ACTIVE on October 16, 2023.MAIA ACTIVE, founded in Shanghai in 2016, and brands such as Particle Mania and Stormy Laurie, which were founded around the same time period, are all perceived by the general public as "pingtai (affordable alternatives)" to lululemon ".

All of these brands started their business online. Among them, MAIA ACTIVE has received several financing and has opened dozens of offline stores in the Chinese market.

What's more, the underwear brand Victoria's Secret force women's sports category, inside and outside and H&M are launched sports sub-brand, underwear brands are also optimistic about women's sports yoga clothing market.

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But even so, the current sports yoga clothing is still an incremental market. Among them, the international yoga clothing brands, including lululemon, still occupy a large part of the consumption of women's sports yoga clothing.

But lululemon through the sports yoga experience community playing method, it seems that for the time being is not a national brand can be imitated to chase the practice. Instead of chasing lululemon, why don't you become its equal?

This is also to MAIA ACTIVE and other brands of cut practice, only equivalent to Nike, Anta, lululemon competition, the survival space of the new sportswear brands are being rapidly squeezed. Sports yoga clothing has become a giant competition market.

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Gymshark, like lululemon, grew up in a small market, but wrestled a big opportunity from a small category and quickly walked into a market ignored by the giants. And Gymshark, with annual revenue of more than 5 billion yuan, is launching a pursuit towards lululemon, a brand with a similar development path.

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And among them are high-end athleisure and outdoor apparel, which has become a new growth point for almost every major brand. Anta needs the lululemon story, Nike and Adidas need.

"Nike, Adidas and other brands have offices around the world, this is the sportswear giants play, and our style of doing things too early to imitate the big companies." Mike admits that today a small team is retained in the U.S. and the brand will consider landing a flagship store in the U.S. in the future, but ongoing marketing campaigns are where the focus lies.

At present, Gymshark is still not stationed in the domestic e-commerce platform and offline stores, but in the jittery voice, small red book and other social media already have accounts in operation, perhaps this is also for the next step in the development in the preparation. Gymshark may be another version of lululemon, the Chinese market is also scarce.

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