Company Overview

FIGS, Inc. (FIGS) is a leading direct-to-consumer healthcare apparel and lifestyle brand that specializes in designing and selling high-quality, functional, and stylish medical scrubs and related products. The company was founded in 2013 by Heather Hasson and Trina Spear, who identified a gap in the market for modern, comfortable, and performance-driven apparel for healthcare professionals. Headquartered in Santa Monica, California, FIGS has grown rapidly, leveraging its innovative approach to healthcare apparel and its strong digital presence.

Heather Hasson and Trina Spear, who serve as Co-CEOs, have been instrumental in shaping the company’s vision and strategy. Under their leadership, FIGS has become a pioneer in the healthcare apparel industry, focusing on quality, design, and customer experience. The company went public in May 2021, trading on the New York Stock Exchange under the ticker symbol “FIGS.”

Core Business Segments

FIGS operates primarily in the healthcare apparel industry, offering a range of products designed to meet the needs of healthcare professionals. The company’s core business segments include:

1. Medical Scrubs

FIGS’s flagship product category is its line of medical scrubs, which are known for their superior quality, comfort, and functionality. These scrubs are made from proprietary fabric technology called FIONx, which offers features such as moisture-wicking, anti-wrinkle, and four-way stretch. The scrubs are available in a variety of styles, colors, and sizes to cater to diverse customer preferences.

2. Outerwear and Underscrubs

In addition to scrubs, FIGS offers a range of outerwear and underscrubs designed to complement its core products. These include jackets, vests, and long-sleeve undershirts that provide additional comfort and functionality for healthcare professionals working in various environments.

3. Footwear and Accessories

FIGS has expanded its product portfolio to include footwear and accessories. The footwear line includes comfortable and durable shoes specifically designed for healthcare workers who spend long hours on their feet. Accessories such as compression socks, tote bags, and masks further enhance the brand’s offerings.

4. Lifestyle Apparel

Recognizing the growing demand for versatile and stylish apparel, FIGS has introduced lifestyle clothing that can be worn both on and off duty. This includes items like joggers, hoodies, and t-shirts, which align with the brand’s focus on comfort and functionality.

Business Model

FIGS operates a direct-to-consumer (DTC) business model, which allows the company to maintain control over its brand, customer experience, and pricing. By selling directly through its e-commerce platform, FIGS eliminates intermediaries, enabling it to offer high-quality products at competitive prices. The company’s digital-first approach also allows it to gather valuable customer data, which it uses to inform product development and marketing strategies.

Revenue is generated primarily through the sale of healthcare apparel and related products. FIGS’s subscription program, known as the “FIGS Pro” membership, provides customers with exclusive benefits such as early access to new products, discounts, and free shipping, further driving customer loyalty and repeat purchases.

Strategic Direction

FIGS has outlined several strategic priorities to drive future growth:

1. Product Innovation

The company is committed to continuous innovation in fabric technology, design, and functionality. FIGS aims to expand its product offerings to include new categories and styles that meet the evolving needs of healthcare professionals.

2. Geographic Expansion

While FIGS has a strong presence in the United States, the company is focused on expanding its international footprint. By entering new markets, FIGS aims to reach a broader audience and capitalize on the global demand for high-quality healthcare apparel.

3. Sustainability Goals

FIGS is dedicated to sustainability and has implemented initiatives to reduce its environmental impact. This includes using eco-friendly materials, minimizing waste in production, and adopting sustainable packaging solutions.

4. Community Engagement

The company actively supports the healthcare community through initiatives such as its “Threads for Threads” program, which donates scrubs to healthcare workers in underserved areas. FIGS also engages with its customer base through social media and other digital channels to build a strong sense of community.

Competitive Landscape

FIGS operates in a competitive market, facing competition from both traditional and emerging players. Key competitors include:

• Traditional Scrub Brands: Companies like Cherokee, Grey’s Anatomy, and Dickies have long been established in the healthcare apparel market.
• Direct-to-Consumer Brands: Emerging DTC brands such as Jaanuu and Medelita offer similar high-quality, stylish scrubs.
• Lifestyle and Athletic Brands: FIGS also competes indirectly with lifestyle and athletic brands like Lululemon and Athleta, which appeal to customers seeking versatile and comfortable apparel.

FIGS differentiates itself through its focus on innovation, quality, and customer experience, as well as its strong brand identity and digital-first approach.

Risk Factors

Despite its success, FIGS faces several risks that could impact its business:

1. Market Dependence

The company’s revenue is heavily dependent on the healthcare apparel market. Any decline in demand for scrubs or related products could adversely affect its financial performance.

2. Supply Chain Disruptions

FIGS relies on a global supply chain to manufacture its products. Disruptions caused by factors such as geopolitical tensions, natural disasters, or pandemics could impact production and delivery timelines.

3. Competition

The healthcare apparel market is highly competitive, and FIGS must continually innovate to maintain its market position. Failure to do so could result in loss of market share.

4. Regulatory and Economic Factors

Changes in regulations or economic conditions, such as inflation or currency fluctuations, could impact FIGS’s operations and profitability.

Recent Developments

FIGS has recently introduced new product lines and expanded its color offerings to cater to customer preferences. The company has also enhanced its digital platform to improve the online shopping experience. In response to the COVID-19 pandemic, FIGS increased production of masks and other protective gear, demonstrating its ability to adapt to changing market needs.

Additionally, FIGS has made strides in sustainability by incorporating recycled materials into its products and adopting eco-friendly practices in its supply chain. The company’s commitment to innovation and community engagement continues to drive its growth and strengthen its brand.

Investment Considerations

Strengths

• Strong brand identity and customer loyalty
• Innovative product offerings and proprietary fabric technology
• Direct-to-consumer business model with high margins
• Commitment to sustainability and community engagement

Risks

• Dependence on a single market segment
• Exposure to supply chain disruptions
• Intense competition in the healthcare apparel market
• Potential regulatory and economic challenges

Conclusion

FIGS, Inc. has established itself as a leader in the healthcare apparel industry, offering high-quality, stylish, and functional products that cater to the needs of healthcare professionals. With its innovative approach, strong digital presence, and commitment to sustainability, FIGS is well-positioned for continued growth. However, the company must navigate challenges such as market dependence and competition to maintain its momentum. Overall, FIGS represents a compelling opportunity for investors seeking exposure to the growing healthcare apparel market.