JustFab acquires subscription shopping site FabKids

JustFab adds kids apparel category with the acquisition

There are a lot of things “they” don’t tell you about becoming a parent. No one told me that my stomach would resemble a pouch of loose turkey skin from here on out, no matter how many crunches I do. And no one told me that babies explode through clothes like the Incredible Hulk, so all those cute little newborn outfits I bought, washed, and lovingly folded would end up packed up and stored in the attic some two weeks later.

My son went through a year’s worth of clothes in his first four months of life. If someone had told me there was a website I could subscribe to that would send me a new outfit for $40 a month—without the hassle of having to load my giant baby into his carseat and haul him to the mall, I would’ve cried with relief and taken a nap.

It turns out—there was a site like that (for girls): FabKids. Founded by ShopStyle founder Andy Moss and actress Christina Applegate (who I want to marry), the site offers its members a personalized selection of kids’ outfits each month. And now the site will reach even more members. JustFab, a leader in the subscription retail category, announced Friday that it has acquired FabKids. The financial details have not been disclosed, but FabKids raised $3 million in financing.

Like other subscription fashion sites, FabKids members take a style quiz, pay a flat monthly fee of $39.95 (although they can skip the month if they want to), and can select their favorite three-piece outfits from the lineup provided. Launched just five months ago, Andy Moss tells me that the site has some 100,000 members. More importantly, it has a return rate of just 2%, which is practically unheard of in the retail industry.

And Moss knows the industry. He’s been in the e-commerce business for some 14 years, most recently as the CEO of fashion search engine ShopStyle, which was acquired by Sugar in 2007.

“We see a huge opportunity to leverage the JustFab technology platform and its 10 million user base,” said Moss.

FabKids will continue to operate under Moss’s leadership in San Francisco, and over time it will migrate over to JustFab’s platform as a sister brand.

It’s an interesting move for JustFab, though, which hitherto hasn’t had much to do with apparel beyond its recently launched denim category. So why is it expanding to kids’ clothes before offering women’s apparel?

The short answer: “We have a road map for the next three- to four years of categories we’d  like to be in—children’s apparel has been on that road map and was something we were going to do later, but the FabKids acquisition allows us to do that sooner,” said JustFab co-CEO Adam Goldenberg, in an interview.

The longer answer: JustFab has 10 million users, and a quarter of those users—roughly 2.5 million—have children under the age of 10, and children’s apparel has been the most requested category among that segment.

“FabKids is a business that has similar attributes to JustFab—it’s subscription fashion, has a very low attrition rate, and very high customer satisfaction in the product itself,” said Goldenberg.

JustFab has been branching out into other categories as of late. Initially a subscription shopping site for women’s shoes and handbags, the site has added jewelry and denim to its offerings, as well as the option for users to subscribe and pay a lower rate ($39.95 a month) or purchase individually as a regular shopper. Goldenberg says that 98% of purchases on JustFab are from subscribers, and that once the company acquires a customer, that customer returns an average of 35-50 times a year.

FabKids will be launching a boys line next year, as well as expanding internationally, starting with JustFab’s markets in Germany, the UK, and Canada.