Gymshark Business Model In A Nutshell

  • Gymshark is a British fitness apparel and accessories company founded by Ben Francis and Lewis Morgan in 2012. Revenue surpassed £100 million after just four years in operation.
  • Gymshark sells a diverse range of men’s and women’s fitness apparel and accessories. The company markets these products through influencer marketing and regularly holds events to strengthen its community-centric brand.
  • Gymshark employs the direct-to-consumer model, which means it has to absorb distribution and customer support costs. The company has made an operating profit of between 9 and 20% for the past six years.

Origin story

Gymshark is a British fitness apparel and accessories company founded by Ben Francis and Lewis Morgan in 2012.

Gymshark began with Francis and Morgan drop shipping body-building supplements online. The following year, Francis began designing and manufacturing a line of fitness apparel in his garage with a meager £1,000 in savings. 

The apparel was an instant success, with Gymshark stock selling out on the first day of a fitness trade show in Birmingham. The company was also able to make several important contacts with industry icons to help spread awareness of the Gymshark brand.

In 2016, Francis and Morgan left university to focus on the business full time as revenue surpassed £250,000. Revenue then surpassed £100 million as the company moved into a new headquarters and opened an office in Hong Kong.

Today, Gymshark is worth around $1.45 billion – with products sold to consumers in 180 countries. 

Understanding the Gymshark business model

To at least partly explain the meteoric rise of Gymshark, let’s now take a look at its business model in terms of products, marketing, expenses, and operating profit.

Product range

Gymshark sells a diverse range of men’s and women’s fitness apparel, including crop tops, bottoms, leggings, hoodies, jackets, shorts, underwear, sports bras, tank tops, and t-shirts. The company also sells accessories such as bottles, bags, headwear, socks, and equipment.

Marketing

The popularity of Gymshark apparel is largely due to the company’s marketing strategy.

Gymshark was one of the first companies to employ influencer marketing, donating its products to weight lifting and gym influencers on YouTube and Facebook. Importantly, the company also championed lesser-known individuals to insert itself into the burgeoning gym culture.

This culture is reinforced whenever a consumer makes a purchase, with Gymshark sending a message welcoming them to the Gymshark family of like-minded individuals striving toward common goals. What’s more, the company regularly hosts various events in cities across the world where fans can meet famous athletes and apparel designers.

By making fan interaction a priority, Gymshark has built a strong and loyal following in what is an ultra-competitive market.

Expenses

Gymshark works on the direct-to-consumer (DTC) model. The company does not operate physical stores, instead preferring to ship items directly to consumers.

Under the DTC model, the biggest expenses are distribution and customer service costs. Without traditional retailers dealing with customer support and fulfillment, the company must wear these costs instead.

Operating profit

Gymshark has remained profitable as it has scaled, which is rare when compared to its peers. To some extent this is due to the direct-to-consumer model, which has allowed the company to remain unaffected by COVID-19 store closures.

Between 2014 and 2019, operating profit sat comfortably in the range of 9-20%. Pre-tax profit for the year to July 2020 was also healthy at £30.5 million.

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