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Figs made scrubs cool. Now it needs to convince investors it will become the health care uniform of choice

June 30, 2022, 11:00 AM UTC
Figs co-CEOs and cofounders Heather Hasson (left) and Trina Spear at Figs’ HQ in Santa Monica.
Michelle Groskopf for Fortune

With store pop-ups in posh shopping meccas like New York City’s SoHo district and Melrose Place in L.A., partnerships with New Balance and Crocs, and a recent launch touting its newest colors—Bonsai and Lavender Dew, Figs could easily be the latest influencer-chasing fashion label.

But co-CEO Heather Hasson has no interest in spotting Figs garments on fashion TikTokers, or any other “layperson” for that matter. “It’s not their uniform,” she says.

What Hasson and her co-CEO, Trina Spear, do want is for Figs, the direct-to-consumer scrubs maker they launched in 2013, to become the de facto uniform for all health care workers, from nurses to dentists to vets to surgeons. They’re making progress toward that goal: Last year, the company shipped its fashion-forward jogger bottoms and polo shirt–style scrubs tops to some 1.9 million customers, up 46% from 2020, and grew sales by 59% to $420 million. The company first turned an annual profit in 2019, and went public the two years later, in 2021—making history as the only IPO ever to be led by two women founders.

Figs has become one of the fastest growth stories in the apparel industry by seizing on a simple idea: make quality health care apparel that’s comfortable and flattering, with forehead-slappingly obvious features like zippered pockets to store a wallet or wedding ring and fabric capable of repelling bodily fluids. Figs brings some fashion industry sparkle to the traditionally boxy and boring world of scrubs, offering “skinny” and cargo-style pants, bold colors, and fun extras like “beep me” and “stethosaurus” compression socks. Critically, the company sells these styles online—a big change for an industry that once asked health care workers to schlep to a medical supply store to buy their scrubs amid bedpans and knee braces.

“That industry didn’t move ahead like the rest of the apparel industry was moving ahead,” says Marie Driscoll, a managing director at Coresight Research. “You have a new set of consumers, they want to express themselves, and the brands that were there look like they’ve been there since 1980. So it was ripe for disruption.”

But while investors bought into the company’s IPO, pushing its shares to a more than double high of $50 in its first two months as a public company, Wall Street has grown increasingly skeptical of Figs’ ability to keep that rapid growth humming. Early this year, investment bank Cowen surveyed 300 health care workers about their shopping habits and intentions, and based on the results, downgraded Figs shares, telling clients it had doubts about how big a market the company would command. Then in May, Figs gave some credence to those concerns, reporting that it had added fewer than 100,000 new customers during the quarter (the first time it had dipped below that threshold since going public). Figs, like the broader market, has seen its shares fall even lower in recent months, now trading at around $7 and down 69% for the year.

woman in doctor scrubs in an operating room
Figs scrubs have changed the way some health care workers dress.
Courtesy of Figs

Despite the skeptics, Hasson and Spear are betting that there’s still plenty of runway for their company to expand. A study Figs commissioned ahead of its IPO estimated the overall market for health care apparel at $12 billion in the U.S. and another $67 billion abroad, numbers in line with other industry estimates. Beyond Figs’ primary line, which, in addition to scrubs, includes items like sports bras and fleece jackets, there’s an expanding “Off Shift” category, where you’ll find garments like a hoodie covered in tiny, embroidered caducei, the medical symbol with the winged staff and twining snakes. Down the line, the company has teased the possibility of branching into other types of professional uniforms for people in working in hospitality, airlines, and food service. But for now, says Hasson: “There’s still so much to do within health care.”

The birth of Figs

When we meet Hasson at Figs’ Santa Monica headquarters, she’s wearing trendy beige pants, and a long silk headband drapes to her waist, a stylish look that nods to her background as a fashion entrepreneur; she founded a high-end handbag line in 2010 before launching Figs Ties, a tie and scarf maker. (Figs are Hasson’s favorite fruit.)

The idea to get into the scrubs business came in 2012, when Hasson met a nurse practitioner friend for coffee in Los Angeles. Her friend had just come off a long shift and arrived wearing baggy, coarse, unflattering scrubs, explaining to Hasson how little choice she had when it came to her work garments, which she bought at a medical supply store. That resonated with Hasson, who had been a premed student in college in the ’90s and herself done battle with ill-fitting scrubs.

“I was cutting up cadavers and holding up my pants with one hand, thinking, ‘Why do they have this one-size-fits-all?’” she says. Better scrubs would mean happier, more successful health care workers, she reasoned: “It makes you feel so empowered when you look good and feel good.”

Meanwhile, Spear was also starting to think about the potential of scrubs. A Harvard MBA, she had looked at medical supply companies while working as an analyst at Blackstone. For decades, hospitals had provided scrubs to their workers. But in the cost-cutting push of the late 1980s, employers ended the practice, leaving workers to fend for themselves. Spear saw opportunity in that vacuum.

When a mutual friend introduced Spear and Hasson in 2012, they quickly realized they shared a vision for a company to fill what they believed was a hole in the medical uniform market. Spear jump-started the business by cashing out her 401(k), and the pair started selling their first scrubs out of the back of Hasson’s car in the parking lot of Cedars-Sinai Medical Center in Los Angeles. Their approach: wait by the doors of the hospital at 7 a.m. and 7 p.m. for the shift change, free coffee and hot chocolate in hand. In addition to selling what they could, the co-CEOs gathered feedback on their products, using it to refine the next versions.

Photo of man in face mask
In addition to scrubs, Figs makes accessories like face masks.
Courtesy of Figs

Today, the pair, whose HQ offices sit side by side, divvy up the CEO job into relatively neat categories. Hasson oversees merchandising and marketing, while Spear supervises aspects like production, finance, and supply chain. That clear delineation, created to suit their skill sets, has led to an unusually durable co-CEO arrangement. (Chipotle, HP, and Salesforce are among the many companies where the two-CEO structure has been a bumpy one.) “I can only be as successful as I can be if Heather is as successful as she can be,” says Spear.

In addition to correctly intuiting that medical workers were tired of chafing and unflattering gear, Figs has ridden a trend that has transformed other areas of apparel: the “casualization” of clothing choices at home and in the workplace that has made athleisure the brightest spot in apparel. In the medical world, that has meant a shift from lab coats over dresses, button-downs, ties, and dress shoes, to scrubs and running shoes—a uniform I witnessed myself on the three orthopedists I’ve seen this year.

Going beyond scrubs

When it comes to Wall Street’s doubts, Figs says it tends to get unfairly lumped together with other direct-to-consumer brands. D2C was a hot sector for several years, but some investors have started to turn on it as cracks in the business model—including high marketing costs and customer churn—have emerged. The co-CEOs say selling scrubs provides a regular revenue stream, and, unlike other clothing, they tend to get stained or otherwise damaged frequently (working in a hospital can be a messy business). Beyond replacements, there’s evidence that health care workers feel the same itch for the occasional “new look” that drives the fashion industry; Figs says that on average, its repeat customers make a purchase every 98 days. And that share of repeat buyers has grown: Last year, 68% of sales came from previous customers, compared with 44% in 2017. 

“We’re a recession-resistant company; we are a nondiscretionary product company,” says Spear. “We’re in an industry where uniforms are mandated.”

As a private company, Figs raised just $75 million, according to Crunchbase. (For comparison, two other retail-based companies that went public the same year, Poshmark and ThredUp, raised $153 million and $304 million, respectively.) That led the entrepreneurs to prioritize profitability far earlier than some of their other D2C peers. “You need to make money right upfront, especially if you don’t have the investment to back you up,” Spear says. Figs has turned an annual profit since 2019, hitting $105 million last year. That kind of consistent profitability is something that still eludes many other e-commerce companies, including Chewy, Casper, and Warby Parker. “People aren’t fully understanding this concept; we’re the first to really combine revenue growth and profitability,” Spear asserts.

Still, continuing on that path will require the company to transform aspects of its business. Now, 13 scrubs styles generate about 80% of its revenue. Pleasing investors will require Figs to grow the remaining 20%—generated by the company’s “lifestyle” products—into a much bigger business.

To get there, Figs is betting on weekly product “drops” to stoke curiosity and demand. It’s also increasingly targeting men, who now generate just 15% of its sales. (The company recently delivered its first-ever color launch for men only.) And it’s constantly on the lookout for new products that will appeal to its customer base. Among the latest: a $200, water-repellent “storm jacket.”

A danger with this kind of expansion is that the company goes too far afield, neglecting its core customers. Shefali Shah, Figs’ chief merchandising and digital product officer, says the company is keenly aware of that risk, pointing to its line of fleeces as an example of how it approaches new products. Hospitals and operating rooms can be chilly, so a professional-looking fleece that includes details like pockets roomy enough to hold a stethoscope and tight wristbands to stop fluids from sneaking down a sleeve make sense for the brand.

“Health care professionals are really our North Star. They need scrubs, but they also need outerwear that works for when they are on shift,” says Shah. “We are not interested in making athletic apparel. We’re not trying to get into loungewear and sleepwear.”

Hasson and Spear say they’ve learned lessons on this front from former Lululemon Athletica CEO Christine Day, who ultimately became an early investor in the brand (as was actor Will Smith, among others). The co-CEOs approached Day early on, suggesting a partnership. Day told them she did see an opportunity for Lululemon to expand into serving health care workers, but ultimately decided that such a move would be a distraction and confuse Lululemon’s core clientele.

woman walking out of a helicopter
In addition to nurses and doctors, Figs markets its scrubs to EMTs, vets, dentists, and other medical professionals.
Courtesy of Figs

Figs aims to engage with the health care community through its popular Instagram account (currently clocking in at 737,000 followers) and with engagement in industry advocacy; this spring, it took out a full-page New York Times ad in protest of the treatment of RaDonda Vaught, the former Tennessee nurse sentenced to three years of supervised probation after her conviction in March of making a fatal medication error. The company also put together an advisory team of health care professionals—including a vet and a dentist—to provide feedback on its products.

Bringing in experience

The latest sign of Figs’ progress in its journey from hospital parking lot to public company is the addition of two A-list executives to its board this year: former Procter & Gamble CEO A.G. Lafley, credited for leading the consumer products giant not once but twice; and the former head of Amazon’s massive retail business, Jeff Wilke, known for his logistics prowess.

Asked about his decision to join the board, Wilke said, “I expect my experiences over the last 30 years, especially helping to build Amazon.com, will provide some useful learnings in leadership, culture setting, managing during fast growth, building a vertically integrated supply chain, and operating a complex tech stack. My goal will be to help Trina, Heather, and the team maintain a terrific culture even as Figs grows larger.”

Such experience should come in handy as the company faces new rivals, supply-chain bottlenecks, and a likely cooling of the economy. But for Spear, it always comes back to those doctors and nurses she and Hasson once chased down outside Cedars-Sinai. “How do we penetrate the hearts and minds of health care professionals?” she asks. “What do we need to do more of?”

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