JustFab, a clothing subscription service that has come under scrutiny in recent months for its questionable customer service tactics, has announced a corporate rebranding and continued growth in sales despite the criticism.
The rebranding efforts include a new company name, dubbed TechStyle Fashion Group, an effort to further expand its business opportunities and base of customers. The company claims the new name: “encapsulates the company’s origins rooted in technology while also signaling its evolution from a single e-commerce site to a global brand-building platform.” TechStyle Fashion Group currently has more than 4 million VIP members across all of its brands, including JustFab, Fabletics (an athletic clothing line co-founded by Kate Hudson in 2013), ShoeDazzle, and FabKids.
BuzzFeed reported that the company’s founder and co-CEO Adam Goldenberg, at a recent presentation to investors and analysts, said the companies brought in more than $504 million in sales last year, including $150 million from Fabletics.
TechStyle Fashion Group operates by charging for VIP memberships from its customers as many subscription services do, but it has come under intense scrutiny for how difficult it is for members to opt out or cancel their subscriptions. They offer deep discounts for VIP members, but users have specific requirements to meet to obtain the discounts, too.
The company claims that VIP members don’t have to buy products each month. However, as a VIP member you are obligated to come visit the website at least once during the first five days of the month and see what your offerings are. You then have the option to skip that month or to make a purchase. If you forget to come or you choose not to come, then you’ll be billed a $40 “membership credit” (or $50 for Fabletics VIP members) that acts like a gift card, where you can use it to purchase merchandise from the site. Customers have complained that it’s still difficult to opt out of these recurring monthly charges.
Just Fab’s co-CEO has a murky business history, too. In 2014, Goldenberg was named in a $50 million lawsuit against Sensa, a weight-loss powder company, the second-biggest deceptive advertising settlement with the FTC. BuzzFeed investigative reporters traced the link back to Goldenberg’s ties with Sensa.
Despite the rocky reputation, the company has had six years of rapid growth. Since launching in 2010, it has quietly become one of the largest online retailers designing, manufacturing and distributing its own brands. TechStyle Fashion Group is projected to surpass $650 million net cash revenue from subscription and merchandise sold in 2016.
