Gymshark Receives Investment Valuing Athletic Apparel Brand at $1.3 Billion

Founding Story — Early Days

  1. He was building websites for businesses as a second job = this led him to creating Gymshark that sold mostly dropshipped supplements online
  2. He was passionate about the fitness lifestyle = this led him to being a student of the fitness industry and searching continuous knowledge
  3. He was 19 years old when Instagram and YouTube was taking off = this led him to seeking out like-minded individuals on social media to feel apart of a community

“What the Heck are those Muscle Shark Stingers?”

Today’s Economics of Gymshark

  • Net Sales = ~$225 million
  • Pre-Tax Profit = ~$23.6 million
  • Cash & Cash Equivalents = 2.5X current fiscal year profit

How did Gymshark become so impressive?

  1. Social Media/Digital/Influencer Marketing = Gymshark was one of the first to lean heavy on influencer marketing when the social media algorithms were giving organic reach out in a bigger proportion to follow size. Additionally, they stayed savvy on social and digital marketing strategies and tactics, and invested heavily to ensure they kept up with the best-in-class in the world (not just their consumer category).
  2. Cash Conversion Cycle = The importance of this should be really bought to light more often, but when you are growing fast in a category that requires physical inventory it can mean the difference in life or death of your business. Gymshark actually has a huge negative cash conversion cycle, which means they turn inventory before the accounts payable is due. That essentially means they can lean on their suppliers to fund their growth and it’s a main reason they haven’t needed to raise outside capital (until now).
  3. Community Management = Gymshark has done a great job of focusing on creating a strong community by not considering customers as just transaction numbers. They have done a great job of this through online and offline (events) strategies. The amount of daily organic user-generated content for Gymshark alone should show you the strength of the brand’s ability to grow a strong community.
  4. CEO Transition (Maturation of the Business) = In 2017, Ben Francis stepped down as CEO and they brought in Steve Hewitt, a seasoned executive from Reebok. This shows an immense amount about the character and vision of Ben Francis. For him to put Gymshark’s success ahead of his ego is impressive at any age, but at 24 you have to just applaud him for it. While Ben Francis is still extremely active and hands on daily, he’s brought in high-level people at all departments to really take Gymshark to the next level.

What does all this success get you?

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Joshua Schall, MBA

Joshua Schall, MBA

Functional CPG Business Strategist | Entrepreneurial Ideation to Commercialization Expert | Early-Stage Investor | Futurist | Sports Stat Nerd |