Medical scrubs startup Figs gears up for $4B IPO

Trendy medical scrubs maker Figs appears to be gearing up for an initial public offering even as it fends off allegations that it got its start stealing trade secrets from a rival, The Post has learned…

The 8-year-old company, which has upended the medical uniform industry with fashionable scrubs it sells straight to the consumer, has been raising money from investors with promises of a “potential exit” in March 2021 due to “an IPO or direct listing,” according to an investor pitch deck circulated by a third-party broker.

The campaign, kicked off in September, seeks to raise $300 million in a “pre-IPO secondary” offering that would value Figs at $1.75 billion, the pitch deck claims. The document suggests that investors stand to double their money when Figs goes public next year at an estimated valuation of between $3.5 billion and $4 billion.

Figs, the document boasted, has a “cult-like” following akin to Lululemon and Peloton and has been a “large and clear beneficiary” of the Covid-19 pandemic. Revenues are slated grow by 124 percent this year to $250 million and the company is poised to turn an operating profit this year after breaking even in 2019, it said.

Figs disputes the revenue and profits figures noted in the deck, adding that it “has never seen the pitch deck and had nothing to do with its creation.”  The deck was circulated by a third party broker who “has no prior relationship or ties to Figs,” a Figs spokesperson added.

Figs has been disrupting the sleepy $10 billion medical apparel industry since 2013 with pricey scrubs that promise to be both functional and fashionable and which are sold directly to consumers instead of in bulk to hospitals.

Known for its provocative ads — including one that caused a firestorm last month for depicting a woman in hot pink scrubs reading a medical book upside down — Figs has attracted celebrity investors like Will Smith and billionaire filmmaker Thomas Tull, who became the company’s majority shareholder in 2018 with a $65 million investment.

Other notable investors have included ex-Lululemon CEO Christine Day and ex-Blackstone partner Ivan Brockman.

But the company also continues to be dogged by allegations that its business plan was derived from a 300-page confidential report that co-founder Trina Spear filched when she worked as a marketing associate for Blackstone, the private equity giant run by billionaire Stephen Schwarzman.

Figs has blasted the litigation as “a desperate bid by an entrenched rival to protect its market share” and dismissed SPI as a “serial litigant” because it filed lawsuits against other competitors in recent years.  According to Figs, the allegations by its largest competitor Strategic Partners Inc., are “without merit.” Figs also pointed out that the case docket shows that several of SPI’s claims have been dismissed voluntarily or by the court since SPI’s initial filing.

SPI’s ongoing lawsuit cites as evidence Spear’s own statements, including a 2016 interview for the Miami Hustle podcast that has her explaining how she met her fashion designer co-founder Heather Hasson.

“I had heard about what Heather was doing,” Spear says of Hasson’s plans to start making scrubs. “She had just had the idea for it and I said, ‘Scrubs? That’s really interesting because we were looking to acquire the largest company in the industry. And I sent Heather the 300-page report we had worked on and she was like, ‘What is this? How do you have this?’”

According to Figs, the scrubs company was “founded by Heather Hasson before she ever met Trina Spear,” and “the founders never accessed or used any confidential information from SPI.”

Figs has “disrupted the industry, and we are proud of the fact that we have donated over 85,000 scrubs and accessories to frontline workers just this year,” it said.

The complaint, which was filed last year and amended for a fifth time in August, doesn’t say whether Blackstone was looking to acquire SPI at the time, but it’s the largest scrubs maker in the world with 40 percent of the US market via brands like Dickies and Cherokee. Blackstone had been an investor and lender to SPI but no longer holds a stake, according to a source with knowledge of the situation. The relationship between the companies pre-dates Spear’s employment with Blackstone, according to Figs.

But SPI’s Los Angeles federal court complaint claims the Santa Monica-based company “crashed into the scrubs market…under dubious circumstances,” saying Figs started as a…

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