Lululemon is a multibillion-dollar chief within the high-end energetic put on class that owns and operates 600 shops, 40 of that are positioned in Europe. Its roots date again to 1998 when it opened as “Lululemon Athletica,” a yoga-wear model geared towards ladies and yoga lovers.
With in-store providers, a heavy emphasis on group symbolized by its well-loved, reusable buying luggage, the model provides an upscale buying and product expertise.
Demand for athletic put on has grown exponentially since these early days, and in 2022 Lululemon continues to prepared the ground, with its second-quarter income hovering 29% yr over yr. What’s extra, the corporate’s three-year compound annual development charge elevated by 25% for girls and 30% for males.
At present’s success does stand in distinction to challenges it has seen previously with unsteady management, product mishaps and provide chain delays. For instance, Lululemon co-founder Chip Wilson stepped down in 2013 after a sequence of inflammatory remarks about its new line of leggings. That set off a shopper controversy. Now, inflation is seen as a looming threat to that double-digit development.
“The patron is changing into way more cautious about spending,” mentioned Neil Saunders, managing director and retail analyst at GlobalData. “And whereas I feel Lululemon’s buyer loyalty will maintain it in good stead, a shopper downturn is unhealthy information for any model, and it’d take a number of the warmth out of Lululemon’s development.”
Nonetheless, the corporate continues to innovate and diversify into totally different classes and wider tech choices. Two years in the past, it acquired tech and in-home train startup, Mirror, for $500 million and this year it launched a new membership program. The corporate additionally unveiled ladies’s footwear merchandise this yr.
These sorts of initiatives are reflective of Lululemon’s ambitious five-year plan set in April 2022 with three strategic pillars — innovation, visitor expertise and worldwide enlargement — at its core. What’s extra, it goals to double its digital gross sales and quadruple its worldwide income by 2026.
Although its diversification efforts have been met with largely optimistic reactions thus far, some analysts fear its wider product breadth could dilute focus for the model that grew from humble roots.