Gymshark Receives Investment Valuing Athletic Apparel Brand at $1.3 Billion

I learned to sew in middle school, but all that got me was the ability to create a worthless furry University of North Carolina pillow that I threw away in a few years!

Ben Francis had a different result with learning the important life skill of sewing after buying a sewing machine (and screen printer) for just over $1000. The teeny tiny difference between our two sewing education stories is that Ben Francis leveraged his newfound skill into an athletic apparel business that is now valued at over $1 billion.

The apparel brand that I’m talking about is Britain’s fastest-growing fashion brand Gymshark.

For those looking for my normal functional CPG subject matter, here is the connection…

Gymshark actually started as an online supplement retailer.

Founding Story — Early Days

The headlines you’ll read right now by searching the Google machine is “Pizza Hut delivery driver turned entrepreneurial success story” (which is certainly true), but it undersells three key elements that aligned Ben Francis to today’s impressive result.

In his passionate accumulation of fitness cultural knowledge, he realized there wasn’t anyone really making clothes for the bodybuilding scene. That inspired him to pivot, spending his £1,000 in savings on a sewing machine and screen printer. Knowing nothing about sewing or garment making, he leaned on the knowledge of his mother and in the early days of Gymshark Ben Francis literally made every piece of clothing custom.

While walking the BodyPower Expo, Ben Francis realized he needed to have a booth there next year and he leveraged the whole bank account to secure a spot. Throughout that next year, they continued to hustle extremely hard to get the Gymshark brand name more exposure. That was when Ben Francis decided to send some of those like-minded social media “influencers” that he was following on Instagram and YouTube some free clothing in exchange for some feedback. That decision likely changed the trajectory of the business as these individuals started creating content with them wearing the Gymshark clothing. As the next year’s BodyPower Expo arrived, Ben Francis had secured some appearances from those early fitness influencers, which created tons of buzz at the show.

“What the Heck are those Muscle Shark Stingers?”

Immediately after the Bodypower Expo closure, the Gymshark website took £30,000 in sales orders. This led to a CAGR of 193% from 2013 to 2016. The success was driven initially by Gymshark becoming one of the first athletic apparel brands globally to make extensive use of social-media influencers.

So, this is when I show you that despite my “see around corners” reputation in the functional CPG world, I’m just a regular shmoe when it comes to a consumer category like fashion…

At the 2014 LA Fit Expo, I was walking the floor in-between client meetings, when I saw the Gymshark trade show booth. I stopped and watched for a bit and was astonished at the energy and excitement at the booth for these odd muscle shark screen printed garments. I didn’t believe in it. I completely wrote it off as another odd bodybuilding clothing brand that I’ve seen hundreds of times at these events.

Fact is, I’m sure I wasn’t the only person that doubted or misunderstood what Ben Francis was building at Gymshark back then, but the evolution from those early days until now is breathtaking.

Today’s Economics of Gymshark

Recent financials show the company finished the 7/31/19 fiscal period at;

…and this is all with a growth rate still close to 75% YoY! Since those financials are now more than a year old, its not crazy to think they are were heading towards $400 million in revenue in FY20, but it’s highly likely that COVID-19 has slowed that growth down.

According to the HSBC International Track 200, which tracks the fastest-growing international sales of mid-market private companies, Gymshark is the highest-ranking fashion brand on the list and 18th globally (Note: Gymshark was highest-ranking globally last year)

How did Gymshark become so impressive?

While there is likely a master class in the making with Gymshark, I think it comes down to these four areas;

What does all this success get you?

No pun intended, but private equity firms circling you like a shark…

When I created the below YouTube on 7/26/20, I was only speculating that an exit was immanent, but on 8/14/20 private equity firm General Atlantic announced they were finalizing a $300 million investment for just over 20% of the business. This investment would value Gymshark at around $1.3 billion and would officially make it the next athletic apparel unicorn.

“I firmly believe Gymshark has the potential to be to the UK version of what Nike is to the U.S. and Adidas is to Germany, and today is a significant step to realizing that.” — Ben Francis

While it’s not fully known how the projected investment would be used, Ben Francis again reiterated that he sees Gymshark competing with Nike and Adidas in the near future. To attain that level of brand growth, Gymshark will need gasoline to throw on its bonfire. At the projected $300M investment, it would provide a lot of gasoline to explore new category opportunities or expand marketing programs.

For those that are inspired by Gymshark’s Founder Ben Francis, I would suggest checking out his personal YouTube page, as he’s been extremely transparent on building the business since 2017.

Do you want to learn more about this subject? Click on the embedded video from my YouTube channel below!

If you enjoyed this article, be sure to share with colleagues and let me know your thoughts in the comments.

FOLLOW ME ON THESE SOCIAL MEDIA ACCOUNTS

YouTube / LinkedIn / Twitter / Facebook / Instagram