Sports brand Gymshark is valued at $1.4 billion, but its founder used to be a delivery boy?

The raging epidemic in 2020 has suddenly reduced people's range of activities, and home fitness-related clothing and equipment have been welcomed by consumers. Gymshark, a well-known British sports brand , has benefited greatly from this trend .

Gymshark is a sports brand that sells sportswear and accessories, with products priced between $20 and $50. It was founded in the UK in 2012 by former pizza deliveryman Ben Francis. Currently, Gymshark's products can be sold directly to consumers in 180 countries through websites that support 13 different languages, with the United States contributing nearly half of its turnover.

In August 2020, the US private equity group General Atlantic acquired 21% of Gymshark's shares for US$300 million. Gymshark's market value reached US$1.4 billion at the time, and the personal net worth of the brand's founder Ben Francis, who was only 28 years old at the time, was estimated to have reached US$980 million.

A legendary brand founded in a garage

First, Steve Jobs founded Apple in a garage, and then Francis founded the Gymshark sports brand in a garage. Francis also hopes to make Gymshark a brand as successful as Apple.

Francis has been interested in weightlifting fitness videos on YouTube since he was a child. At the age of 18, he was studying at Aston University. He worked part-time as a pizza deliveryman for Pizza Hut at night and spent the rest of his time in the gym, but he couldn't buy the fitness clothes he really liked.

To solve this problem, he began to sew clothes himself using a sewing machine in his parents' garage. In 2013, he collaborated with his college classmate Lewis Morgan to make clothes and adopted the logo of a great white shark lifting a barbell, and then sold them online through the gymshark.co.uk website. Interestingly, this website was originally used by them to sell bodybuilding supplements, and later the product range sold on the website was gradually expanded to sportswear, leisure wear, running clothes and fitness accessories such as foam rollers, resistance bands and beach towels.

Also in 2013, the booth rented by Gymshark at BodyPower, the largest bodybuilding expo in Europe, was overwhelmed by the crowd, generating sales of 30,000 pounds in 30 minutes, and the prepared products were quickly sold out. After the grand event, they could receive orders worth 42,000 US dollars a day. Francis therefore came up with the idea of ​​creating a brand.

After Francis provided free clothing to fitness influencers on social networking sites for promotion, Gymshark's online sales soared from $450/day to $45,000/day. When the company's sales revenue reached £250,000, Francis and Morgan decided to drop out of school to focus on the brand full-time.

In the following years, Gymshark expanded rapidly and opened offices in Hong Kong, China and Denver, USA. However, Gymshark's development was not always smooth.

Ditch Magento and switch to Shopify Plus

Gymshark's business is mainly conducted online, so the construction and maintenance of an independent website is crucial to the brand.

Canadian website building service platform Shopify was founded in 2004, and in fact Gymshark was originally born in Shopify, but when the brand's sales grew rapidly in 2013, Gymshark realized that they needed a new solution. Shopify Plus had not yet been launched at that time, so the Gymshark team later chose Magento, an open source website building tool under Adobe.

Francis recalled: "It took 6 to 8 months to build the website, but by the time the website was completed, our sales had doubled and had exceeded the website's capacity." For this reason, Gymshark spent hundreds of thousands of dollars to maintain the website.

But Gymshark's website still failed to survive the Black Friday shopping festival in 2015. During the Black Friday promotion in 2015, Gymshark's official website crashed for a full 8 hours, and consumers were unable to place orders and pay normally, resulting in a loss of up to $143,000.

Along with sales, consumers’ goodwill and trust in the Gymshark brand were also damaged . More and more consumers flocked to social media to “seek an explanation”. The website crash not only wasted several hours of their time, but also disrupted their already scheduled schedules.

"This should have been a huge day and we've let our customers down," Mr Francis said .

After that, the Gymshark team did the only two things they could do. The first was to apologize. Francis wrote more than 2,500 apology letters and offered discounts to consumers affected by the website crash. The second was to rebuild the official website. Eight hours after the Black Friday crash, Gymshark urgently migrated to Shopify Plus. Shopify Plus is an enterprise-level product that can scale on demand with high-growth brands such as Gymshark .

Using Shopify Scripts, Gymshark was able to customize the checkout function and provide surprise gifts for old fans of the brand. At the same time , in order to provide customers with a better mobile shopping experience, Gymshark's checkout process (from product page to payment page ) is mainly customized for the mobile e-commerce experience .

After executing a multi-channel global growth strategy, Gymshark achieved a 9.3% ROI on its Black Friday social media ads; overall sales revenue increased 197% during Black Friday; and sales revenue reached $128 million in 2018.

Using small influencers to defeat sportswear giants

According to Forbes, the amount of sponsorship that Gymshark provides to its "influencers" is not high, ranging from $6,000 to $100,000 per year. At the same time, Gymshark does not require them to comply with a series of strict conditions, as long as they wear sponsored clothing when appearing on camera.

Sportswear is a big business. In 2019, global sales of sportswear exceeded $176 billion. However, the marketing investment of sports brands is also very "horrifying". Nike needs to pay LeBron James $1 billion, and pays tennis star Naomi Osaka more than $10 million in endorsement fees every year, and also produces and broadcasts luxurious TV commercials.

In contrast, Francis achieved his goal with only a small budget . It is reported that Gymshark hired a total of 80 "influencers" in the "fitness" field , which successfully allowed Gymshark to gain more than 2 million users on Tik Tok, while the number of TikTok users following Nike is only 700,000.

Francis revealed that this approach helps him reunite members of the so-called Generation Z in an unconventional way. "Young people only want to buy brands that are led by a community that aligns with their values. Therefore, we are also a community that sells goods." Gymshark's marketing strategy has brought it admirable financial growth. In 2019, Gymshark's sales revenue increased by 40% to US$330 million.

Online and offline marketing activities are in full bloom

Gymshark’s product images and content posted on digital platforms feature bright, and in some cases even appear overexposed.

However, the company holds a "Blackout" event every year during Black Friday. "Everything will be black," said Noel Mack, Gymshark's brand director. "Models will wear black clothes, and we will even post completely blank black pictures on Instagram, which is completely different from our daily content."

This unconventional marketing model helped Gymshark attract more potential consumers. In order to successfully hold this event, the "Blackout" team first selected which platform and format would best illustrate the story to be told, and then it would customize the marketing content according to the platform page size, format and aspect ratio.

It is reported that the return on investment of this advertising campaign was as high as 9.3, which also increased Gymshark's Black Friday sales revenue by 197% year-on-year , breaking the previous sales record .

Offline, Gymshark also aggregates Internet celebrities to open offline pop-up stores. Just like rock stars go on tour and provide free concert tickets, Gymshark organizes and executes its own world tour; it recruits suitable fitness ambassadors around the world, allowing fans and followers to meet idols face to face without paying.

Gymshark continues to expand globally

Since moving to Shopify Plus, the Gymshark team has been able to focus on growing the brand and experimenting with innovative products, such as developing a new generation of wearables that can empower athletes or help avoid sports injuries.

The company is now reportedly focusing on strengthening transportation and logistics facilities to speed up product delivery while expanding its business in the U.S. market . As American customers are accustomed to Amazon's fast delivery service, Francis has opened two distribution centers in California and Ohio, and is expected to start operations in the summer of 2021. In addition, Francis is also expanding the U.S. team and plans to recruit another 15 people, four of whom will serve as scouts to help find and manage emerging American stars and influencers.

Gymshark also planned to move its 500-employee corporate headquarters from Solihull, England, to a Denver gym in the United States , but the pandemic delayed those plans.

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