The Secret To This High-End Athleisure Site's Success
Fashion and fitness — both are fields in which being aspirational is the key to sell-out success (whether it's clothing or classes being purchased en masse). Luxury fitness e-comm Carbon38 has been betting big on that approach, specifically by casting non-models to sell its sleek, stretchy wares. And it certainly seems to be paying off.
First, a bit of background: Carbon38’s cofounders, Katie Warner Johnson and Caroline Gogolak, are former ballet dancers who met at age 15 and later went to Harvard together. Both ditched their finance gigs to launch the company in 2013. An alum of Morgan Stanley and Goldman Sachs, Gogolak was studying for the GMAT, but toyed with the idea of starting her own company in lieu of going to business school.
Warner Johnson deferred an offer to work on Wall Street after graduating from Harvard in order to dance professionally, and became a fitness instructor at Physique57 on the side. “A dancer’s salary does not pay Manhattan rent,” she says. “I got to understand my [Physique57] clients’ spending patterns, which were exorbitant. I was also seeing that instead of saving up for a handbag or shoes, our generation has been saving up for a SoulCycle package, juice cleanse, or meal-delivery service.”=
Since its inception, the site has used actual fitness professionals instead of models to sell its pricy threads, to lucrative results. “We used to work with a model who was not an instructor, and it was very difficult to get her to move and be active in shots,” Gogolak said, noting that in the site’s earliest days, she and Warner Johnson often doubled as models on it.
One day, that model didn’t show up for a shoot, and the creative director called her favorite yoga instructor to fill in last minute. The resulting shots showcased activewear looking, well, active. Having an uber-toned fitness pro in lieu of a traditional model amounted to a 70% sell-through rate in a week, versus 30% on the items not modeled on fitness pros. Nowadays, when Carbon38 sends out its daily emails heralding new products, it sees a 12% higher click-through rate when the items are modeled on a woman doing a yoga pose than those presented in traditional fashion-model stances.
Warner Johnson’s seven years of experience teaching Physique57 classes was also an impetus to show workout clothes on people who work out for a living. “I’d witnessed the power you hold as a fitness professional, on a mic in front of a class of 20-plus women listening to your every word, whether you’re telling them to ‘squeeze-and-tuck’ or your skin-care regimen, or what kind of yoga pants you’re wearing.” In Carbon38’s early days, whenever Warner Johnson wore an item stocked on the site while teaching classes, it would promptly sell out.
As for the name, it has endearingly geeky origins. “If you add up all the carbon atoms in all the humans on earth, it’s 10 to the 38th power, and the URL was on sale for $1.99 on GoDaddy.com,” Warner Johnson says. And the site's offerings are just as approachable: Stocking unknown brands has been a priority since the its launch. "Everything on our site sells well; there isn't one brand that sells a lot better than others, and that speaks to the need in the marketplace," Gogolak says. "We can move a $60 pair of Onzie leggings and a $400 pair of Lucas Hugh leggings just the same."
International sales account for 9% of the site's sales, and Dubai and Hong Kong are Carbon38's top-selling cities outside of the U.S. "There's one family in Riyadh, Saudi Arabia that purchases a lot; it's interesting to see their purchasing patterns," Warner Johnson says.
Carbon38 was around for a solid year or so before Net-A-Porter launched a standalone athleisure site, Net-A-Sporter, arguably posing the biggest competition to Gogolak and Warner Johnson’s site and its fashion-meets-fitness M.O. “There was initial panic, but after 24 hours, we chilled out and saw that it was a good thing,” Warner Johnson says of learning about Net-A-Sporter. “It signified to us was that more people were wearing activewear than ever, and activewear was being accepted as chic. There are so many juice bars across the country — that just means more people are drinking juice. It’s the same thing for activewear.”
The retailer has stocked a couple of branded tees and such in the past, but on December 1, Carbon38 will launch its very own collection priced at $100 to $300. It’ll go beyond the expected leggings, sports bras, sweatpants, and workout tops — there will also be dresses, jackets, and jumpsuits in the mix. Beyond the eponymous line, Carbon38 also has a project in the works with a yet-unnamed boutique fitness studio that will be out in the next few months. Brick-and-mortar stores will crop up eventually, as well. “We’ll do it in a way that’s disruptive to the retail landscape,” Gogolak says. “But we’re growing so fast online currently, we want to stay focused [on e-commerce].”
The site’s most steeply-priced items — we’re talking mid-three figures — could certainly be seen as exorbitant. (Granted, the easily spoof-able activewear boom has reached a point where Lululemon recently hiked its already-high legging prices, much to customers’ ire, and Brit import Sweaty Betty has been raising eyebrows with its pricing.) Carbon38 doesn’t have a price cap for its inventory, but everything gets wear-tested: “If the quality is there and they’re worth the price, we’ll sell it.” Gogolak says. “If we believe a pair of leggings are worth $400, we’ll stock them.” An exceptionally splurge-y sports bra is a total luxury, but the site vets every single Spandex-packed item with wear-testing before deciding what to stock.
Suffice it to say, their business acumen is paying off. Carbon38 has raised $5 million to date, and will be going out for Series A funding next year. But will the athleisure bubble burst anytime soon? That concern warrants an emphatic “no!” from Gogolak. “Look, denim sales are down 6%, and activewear sales are up 45%,” she says. “This is not just a trend, this is a cultural shift in the way women are dressing.”
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