Apparel businesses aren't often considered to be the most exciting investment opportunities, but recent IPO Figs (FIGS) might be different. In this Fool Live video clip, recorded on Sept. 27, Fool.com contributor Matt Frankel, CFP, explains why this innovative healthcare apparel company could be worth a closer look.
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Matt Frankel: FIGS, ticker symbol FIGS. I've talked about FIGS before, on these shows, they are a healthcare apparel company. The reason I know the company so well even before they were public is because my wife is a healthcare professional. My wife is actually running a COVID ICU right now as I'm talking, so she's definitely has some more stressful job than I do. I just get to sit here and chat with Jon. But point being not a week goes by where envelope from FIGS doesn't wind up at our door.
I actually think there's one in that pile of boxes behind right there, they just got here. They make healthcare apparel, scrubs, in particular, that are designed to be not only more comfortable, which they are, my wife will never buy another brand of scrubs right now, but a lot more identifiable. I don't know of any other big popular scrub brands other than just a standard like uniform brands. Scrubs have become very commoditized over time in healthcare apparel.
Healthcare, it's an industry where it doesn't need to be a uniform, the reason being 85% of healthcare workers buy their own close, which is not very common to have that percentage in an industry that is very uniform. I guarantee you, 85% of police officers don't buy their own uniforms or don't pick out their own clothes, so it's a really unique market, it's a huge market. 14% of U.S. workers are healthcare workers, 22 million healthcare workers in the U.S. alone.
When you hear that FIGS has 1.3 million active customers, that may sound like a huge number. But when you realize there are 22 million healthcare workers in the U.S. alone, not to mention opportunity overseas, and healthcare workers order scrubs a lot more than you may think. Like I said, an envelope from FIGS ends up at my door step once every week or two. My wife will buy a scrub top that she likes, or she'll want to pants that match something, or she was working, and blood got on one of her scrubs, which happens more than you might think when you're working in ICU. Nurses and healthcare workers buy apparel a lot more often than you might think.
Huge market opportunity, they have a great cost structure, 98% of their sales come digitally. Excuse me. Before FIGS came along, my wife used to have to go to the scrub shop that was across town because you've to go to a specialty uniform apparel place to buy it. Now, you don't have to. Great economics, it's a growing market too. Healthcare employment is supposed to grow at four times the average rate of the average profession in the U.S., 15% growth is expected over the next 10 years, so FIGS estimates its total addressable markets be $12 billion in the US in annual revenue and $79 billion globally. They did, sorry, I couldn't read my own writing for a second, $263 million in revenue last year, so they've barely begun to scratch the surface.