Figs just scored a major victory months after winning a lawsuit by a chief rival that claimed false advertising and unfair business practices.
On Wednesday, the California-based medical scrubs maker and Careismatic Brands, formerly known as Strategic Partners Inc. (SPI), buried their bad blood, officially settling all litigation related to the lawsuit SPI filed in 2019.
The settlement comes three-and-a-half months after a jury in the U.S. District Court for the Central District of California rejected SPI’s claims and found in favor of Figs.
SPI, a medical apparel and uniform manufacturer that owns brands including Cherokee Uniforms and Dickies Medical, had claimed that Trina Spear and Heather Hasson, co-founders of direct-to-consumer Figs, violated advertising regulations by falsely claiming their scrubs are made to protect the wearer from bacteria or disease through the use of an antimicrobial chemical called Silvadur.
In the lawsuit, SPI said Figs’ claims that this chemical helps its scrubs reduce hospital-acquired infection rates by 66 percent was untrue and misleading.
Spear, who is also the Co-CEO of Figs, said in court that the statistic appeared on the company’s website not in reference to the scrubs’ antimicrobial properties, but specifically toward the scrubs’ ability to reduce hospital infection rates.
The lawsuit also claimed that Figs misrepresented its charitable donations. Figs also denied these claims, and shared videos of its founders’ multiple charity trips on its website.
Following a three-week trial, the jury unanimously decided that Figs’ claims that its scrubs killed bacteria were both not literally false nor deceived a “substantial segment of Figs’ audience of consumers.” The jury also ruled that Figs did not engage in false advertising, and that SPI was not entitled any damages.
Figs chief legal officer Todd Maron denounced the “nasty” court battle.
“The jury verdict was a powerful win, not only for Figs, but for fair competition,” Maron said in a statement. “SPI engaged in a nasty, four-year campaign against Figs, engineered by its former CEO Mike Singer and based on outright falsehoods. SPI had sued competitors at least twice before in similar situations, and we felt it was important to stand up for the truth when confronted with a baseless lawsuit. We’re gratified that our decision was vindicated by the jury’s verdict, and that SPI was not allowed to stifle another company’s growth.”
In a statement, Careismatic said it sued Figs to fight for a fair and transparent marketplace and to protect healthcare workers from false and dangerous advertising claims.
Despite the settlement, SPI still maintains some of its claims, saying “the facts and evidence uncovered during the litigation made it abundantly clear that Figs’ marketing claims that were the focus of the case were unauthorized, misleading and deceptive.”
Only after the lawsuit was filed did 10-year-old Figs stop making those claims, SPI pointed out.
As part of its settlement, Careismatic says it now “looks forward to competing in a fair marketplace based on accurate and factually supported marketing claims.”
A November securities class action lawsuit against Figs claims its S-1 registration statement contained false statements. The issue revolved around claims that “due to the company’s access to significant customer data, it was able to maintain an efficient and steady supply chain.”
The plaintiff in that case alleges, “The truth was, however, that the company’s access to data did not allow it to mitigate supply chain problems through predictable sales. Instead, Figs had to increasingly rely on air freight that costs materially more than the overseas shipping it was previously reliant on.”
Class action claims are likely to hit a wall, since Figs’ terms of service clearly states that people who buy its products online agree to an arbitration clause that prevents a class action case.
In the fallout of the Figs-SPI lawsuit, it appears both companies have a new competitor in the burgeoning medical apparel space.
Fabletics gets into the scrubs game
Fabletics said the Wednesday launch of its own activewear scrubs line brings “the brand’s expertise in premium quality, design and performance wear” into the medical apparel category, according to a statement from the brand.
The sister brand of Savage X Fenty says it pored over research and insights from over 6,500 medical professionals when developing the Fabletics Scrubs line.
Fabletics Scrubs is the Kate Hudson-backed brand’s attempt at redefining the traditional scrubs uniform. The collection of performance-grade workwear offers durable and all-day comfort.
The brand is entering a market that was valued at $3.53 billion in 2021, according to a report by Vantage Market Research. In total, the surgical apparel market is projected to reach $4.91 billion by 2028, growing at a compound annual growth rate (CAGR) of 6.5 percent from 2022 to 2028.
The demand is there, the report said, with surgical apparel’s overall growth primarily driven by the increasing number of surgical procedures being performed, as well as rising concerns regarding the transmission of infections in healthcare settings. On top of these issues, the growing adoption of minimally invasive surgical procedures and technological advancements in surgical apparel materials are expected to fuel market growth.
Fabletics initial 12-piece scrubs collection is part of the brand’s VIP membership. The line includes seven women’s items and five items for men’s, with assorted tops, joggers, pants, jackets and underscrubs in eight colorways.
Fabletics said each piece is made with performance-grade fabric that is breathable, lightweight and antimicrobial. The pieces are sold in sizes XXS to 4X, and three in-seams are offered. Fabletics also developed in-house embroidery capabilities to customize tops and jackets.
“Creating Fabletics Scrubs was years in the making,” said Adam Goldenberg, co-founder and CEO of Fabletics, in a statement. “This collection is inspired by the medical community and it symbolizes our gratitude for the important work that these individuals do every day. We conducted comprehensive research and received direct feedback from these professionals, as we are committed to creating a product that can perform at the highest level and meet all their needs.”
In tandem with the launch, Fabletics also created the Founders’ Circle—a community of scrubs wearers from various professions within the medical community—to provide feedback on the overall design, fit, colorways, and fabric names. This community, which is featured in the brand’s visual campaign titled “Made To Move,” were the first consumers to wear-test the garment.
“The Fabletics Scrubs design process with the Founders’ Circle was vital in creating a product that is unlike anything currently available on the market,” said Fabletics designer Vanessa Espinosa. “It was an instrumental collaboration that ensured every detail was considered in the making of this collection. We created Fabletics Scrubs for scrubs wearers, with scrubs wearers.”
To celebrate the launch, Fabletics embarks on its largest product donation to date, gifting scrub sets to 25,000 medical professionals across the U.S. Fabletics collaborator, actor and comedian Kevin Hart also donated scrub sets to an organization in his hometown of Philadelphia.
The scrubs line is available at Fabletics VIP member prices, ranging from $29.95-$69.95 with a scrub set priced at $64.95 and member credit redeemable.