In ten short years, Gymshark co-founder Ben Francis took his fitness apparel company from
his parent's garage into a billion-dollar company that pioneered influencer marketing
and harnessed the power of social media. So, did he get Gymshark off the ground,
and what steps did he take to build it into one of the UK’s fastest-growing companies?
Hey, I’m Josh. Join me as I break down Gymshark
and share how it all started, where the early growth came from,
what the future holds, and what three lessons you can learn from its rapid growth.
Lesson one: Building a business based on your passions makes it easy to put in
the long hours needed to get it off the ground.
School friends Ben Francis and Lewis Morgan founded Gymshark in 2012. At the time, both were
at university and only 20 years old. To support themselves, they worked part-time after school.
Francis was a delivery driver for Pizza Hut and Morgan, a retail assistant at a menswear store,
and a pot washer at a local hotel. Francis was obsessed with fitness and
going to the gym. He had even launched a few fitness apps and websites already.
But he wanted to take the next step and sell actual products online. Supplements seemed like
the obvious choice, but he couldn’t afford the minimum orders with his Pizza Hut paycheck.
He came up with a creative solution that wasn’t very common back then. Drop shopping. This meant
he didn’t have to buy stock and risk his own cash running the website he named Gymshark.
After a few months of dropshipping, Francis bought a screen printer and sewing machine with the help
of his brothers and friends. This was to solve their problem of not finding fitness clothes that
made sense for their body types. They were looking for something streamlined and tapered, but all
that was available was large, boxy, and baggy. Francis had learned how to sew from his
grandmother and started to make gym vests and t-shirts in his parents' garage.
He recalls this as a time-consuming but enjoyable period in the company’s life. Saying, quote,
"I remember thinking we had 10 orders to do and to make 12-15 products it would take most of the day.
But it was so much fun learning." Gymshark made about £500 in sales per day
during this first year. Around this time, Francis visited the Bodypower expo. After attending,
he knew that if he wanted Gymshark to be known in the fitness industry, he’d have to exhibit
there. Based on this gut feeling, he booked a spot for Gymshark for the next expo.
In the year leading up to the expo, Francis would see Gymshark grow big enough to place his first
order from a manufacturer. He also saved enough money to upgrade his space at the expo and bring
YouTube fitness athletes along with them. The expo was filled with supplement brands,
with bodybuilders signing autographs at the back of their stands. Gymshark, on the other hand,
launched its Luxe tracksuit. It also had an open stand where anyone could stop by and have a casual
conversation with its’ athletes. While having YouTube influencers at your stand makes total
sense now, at the time, this was brand new. The following three days saw Francis and his
team selling out all the stock they’d brought along. They also got to know their customers,
helping establish the Gymshark community. When he got home from the expo, Francis
decided to turn the store back on, sharing on Facebook that it was live again.
Orders started flooding in, and within 30 minutes, they’d sold out of everything, more than they’d
sold in their entire history. This was the moment Francis knew he’d created something special.
To help the company grow even further, Francis and Morgan spent all their time focused on making
Gymshark a success. Morgan says of this time that, quote, “We never went out. We never went
clubbing. We were basically what other people would call losers. All we did was business.”
The hard work paid off. In 2015, just three years after founding the company, Gymshark made £9
million in sales. The following year, the company was named the UK’s fastest-growing company.
Lesson two: be brave enough to be a pioneer and try new things.
Gymshark’s rapid growth was due in part to its early adoption of influencer marketing.
It sent free products to prominent bodybuilders and fitness influencers.
These included Lex Griffin and Nikki Blackketter. By 2020 it had 125 influencers on its payroll.
It also focused on making its social media channels interesting.
This helped it reach 5.6 million followers on Instagram and almost 2 million on Facebook.
Francis explains that, quote, "We were one of the first businesses in the world
to sponsor influencers. Equally, we were one of the first businesses to
really double down and invest in social media." Another reason is that Gymshark is an online-only,
direct-to-consumer brand. This means it can easily react to changes in the market and doesn’t
have to deal with expensive store costs. Lesson three: see possibilities, not problems.
After this early growth, Gymshark saw three big shifts that dramatically changed its trajectory.
Morgan left the company in 2016 to focus on his property development company and fashion label.
He still retained a 21% stake in the company. A year later, Francis was replaced as CEO
by Reebok’s former head of sales in Europe, Steve Hewitt.
Under his leadership, the company was able to crack £100 million in sales the following year.
Finally, in 2020 US private equity firm General Atlantic bought Morgan’s 21%
stake in the company for about £200 million. This valued the company at over £1 billion.
Since then, Gymshark has continued to grow. This is thanks in part to the pandemic,
which saw more people running, cycling, and exercising at home during the lockdown.
Gymshark is now available in 230 countries via its 14 online stores, and it employs over 900 people,
with offices in five regions. All this has helped Gymshark’s turnover
grow to £400 million in 2021, a tenfold increase over the last four years. Although the latest
profit numbers aren’t available, for the year ended 2020 they increased to over £24 million,
up from just under £15 million in 2019. By comparison, Nike reported a net income
of $5.7 billion for the year. These three lessons had a big impact
on Gymshark and Francis, who returned to the CEO role after gaining experience from
different senior positions. These include chief technology officer, chief marketing officer,
and chief product officer. Looking to the future, Gymshark is developing
its first physical store in Regent Street, London. The three-floor, 18,000 sq. ft. flagship
store will host events and community hangouts and feature workout studios and on-site classes.
And while Francis had held talks with banks and investors about a possible IPO,
he says he’s not planning on taking Gymshark public anytime soon.
Instead, Gymshark’s focusing on expanding in the United States, having recently opened
an office in Colorado. It’s also added US entrepreneur Gary Vaynerchuk as an advisor
to its board. He will assist with marketing and brand development in North America.
From a pizza delivery boy's idea to combine his passion for fitness with online retail, to a pivot
into athletic wear because he couldn’t find the styles he wanted to wear himself, Gymshark emerged
at the right time to take advantage of the rise in popularity of direct-to-consumer online stores.
At the same time, it was an early pioneer in influencer marketing and used its
social media channels to the fullest. That’s it for another business breakdown.
Which business should we break down next? Let us know in the comments. Until next time, bye!