From Selling Out Of Your Car On The Street To $400M In Yearly Revenue

Date

Heather Hasson and Trina Spear teamed up in 2013 to transform healthcare apparel. Heather had some history of tailoring clothes, and she had tailored better fitting/more comfortable scrubs. The two started out selling these scrubs out of their car on the street of Los Angeles during shift changes at the hospital.

They learned quickly that the way healthcare workers purchased their work clothes was broken. No one was bringing the clothes to the healthcare providers. Previously, they had to go to an outdated brick-and-mortar store to purchase their work clothes. Thus Figs was born to be a direct-to-consumer healthcare apparel brand.

Figs IPO

Figs went public on May 27th, 2021 with a valuation of $4.6B. Today, with the stock price around $39, Figs is now valued at $6.2B. In Q2 and Q3 of 2021, Figs surpassed $100M in quarterly revenue each quarter. Figs is expected to generate $410M in total yearly revenue in 2021 (up from $263M in 2020).

If their market cap stays about the same, this means they will be trading at 15X their sales.

Figs’ Customer

Currently, Figs has 1.7M active customers (active is defined as a customer who made a purchase in the past 12 months). This is up from 1.1M active customers a year ago.

50% of Figs customers come back and buy again, and 60% of Figs’ revenue is from repeat customers.

66% of Figs customers make under $100K a year, and 33% of them make under $50K.

Figs estimates they currently only serve 3% of the addressable United States market.

Figs Customer Demographics:

Lifestyle Apparel

Figs extended their product offering beyond scrubs and moved to general lifestyle apparel. In Q2 of 2021, lifestyle sales attributed to 11% of their net revenue (approximately $11M in total net sales). In Q3, that percentage increased to 13% (approximately $13.3M in total net sales).

Marketing Spend

Figs has very efficient marketing spend. They spend approximately 15% of net revenues on marketing. In Q3 2021 that was $15.7M in total marketing spend (this is up from $9.6M in Q3 2020). 

60% of Figs website traffic is organic (non-paid). Figs attributes this to word of mouth and repeat customers. 

SimilarWeb estimates Figs traffic to be around 3M visitors per month. If SimilarWeb’s traffic estimation are correct, Figs would be seeing around a 10% conversion rate (my bet is SimilarWeb is a little low on their traffic estimation for Figs.com).

Facebook Ads

Figs has 280 active ads on Facebook currently. 

See their Facbook Ads

Paid Search

Top 5 Paid Keywords:

  1. figs
  2. scrubs and beyond
  3. uniform advantage
  4. jaanuu
  5. figs scrubs

Figs is targeting their top competitors’ brand names (Scrubs and Beyond, Uniform Advantage, and Jaanuu). So when some searches for one of those brands, Figs’ ads are shown.

Average Order Value

For Q3 2021 Figs average order value was $102, this is up from $93 a year ago (after removing a one-time $4.5M related party sale from their Q3 2020 revenue).

Figs has had a consistent focus on growing their average order value. They introduced kits, that allow the consumer to purchase multiple items at once. They have seen this help increase their average order value.

In Q3 2021, Figs processed just over 1M orders. In Q3 2020, Figs processed 780K orders.

Q4 2021 Expectations

Figs has upped their total 2021 revenue guidance to $410M (up from $395M). For the first 3 quarters of 2021, Figs has generated $290.9M in revenue. That means, Figs is expecting to generate $119.1M in revenue for Q4 2021.

I started tracking Figs at the start of Q4 2021. In the first 41 days of the quarter, Figs has processed 496,796 orders. With an average order value of $102, Figs has so far generated $50.6M in revenue this quarter. Figs is 42.49% of the way to their quarterly estimate, thru 45% of the quarter (with the Holiday shopping season still to come).

Based on everything I am seeing, I expect to see Figs well surpass their quarterly revenue estimate of $119.1M

It is Figs’ goal to reach $1b in sales by 2025

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