Dec 12, 2019 Lululemon isn't expecting a peaceful holiday shopping season Read More Feel free to go back to child's pose anytime... Investors aggressively dropped shares of Lululemon after Wednesday's earnings report — they're blaming the future, not the peaceful past:
The 3rd quarter: Sales rose 17% at existing stores, and 23% overall because it added 53 new Lulus over the past year. All that, plus its profits, beat expectations.
This quarter, aka this holiday season: Lulu gave investors a heads-up that it's expecting fewer sales than they do: $1.3B.
The unhelpful clarification: The CEO blamed a late Thanksgiving, awkwardly reminding us that there are 6 fewer holiday shopping days this year than last.
Return to the top of your mats... where Lululemon's stock was enjoying a record high earlier this week. The brunch-worthy athleisure industry is fiercely competitive, but sizing up Lulu to Nike has begun (investment bank Cowen compares Lulu's growth to Nike's) — and since Nike is currently 5x as valuable as Lulu, shareholders appreciate the aspirational side-by-side.The Takeaway:Here's the secret to becoming the next Nike... Be a lifestyle brand. Lulu patented "Luon" and "Luxtreme," the technical fabrics that make yoga pants stretchy and sweat-proof. Now it's focusing on some serious lifestyle moves to differentiate itself:
Stores with built-in yoga studios (like this 20K-square-foot giant in Chicago).
Personal care products from deoderant to shampoo for post-shavasana shower routines.
More focus on including guys, whose sales jumped 38% last quarter.
And it calls its customers "guests" — seriously, CTLR + F this earnings report to prove it.
Oct 22, 2019 Destination Maternity files for bankruptcy because, you know, Millennials and athleisure Read More What to expect when you're expecting bankruptcy... Destination Maternity just filed for it. Technically its 436 stores (including "A Pea In The Pod" and "Motherhood" brands) stay open while a judge decides what to do with this overly-indebted chain. Despite partnerships with Jessica Simpson and a hail mary promotion with the NFL, the pre-mom outfitter's sales still shrank 25% over the past 3 years.
Maternity clothing needs Lamaze breathing exercises... While ecommerce brings on the retail-pocalypse, maternity wear is especially primed for disruption. Here's what's blurred the line of whether you even need to buy a maternity wardrobe:
Extended athleisure: Stretchy gear means postponing that maternity wear purchase another trimester because you've already got Lululemon.
Digital stylers: Fashion subscription services like Stitch Fix already know your wardrobe, and their humans/algorithms suggest what you'll need pre/post-baby.
Clothing rental: You'll only need that materni-romper for less than a year, making it perfect for rental businesses like Rent the Runway and Le Tote.The Takeaway:Adult milestones are hitting later... Marriage, babies, house-buying — all increasingly delayed by student loans, careers, and plenty of hefty cultural factors (we're tired of the “Millennials killed X” narrative, too). That social shift didn't just hit Destination Maternity — David's Bridal filed for bankruptcy this year and diaper sales in the US have dipped 0.3% annually from 2012 to 2017. Sep 13, 2019 Under Armour aggressively commits to an anti-athleisure lifestyle Read More Under Armour hates brunch... Not really (but kind of). The house-protecting brand has decided to commit to what it does best: "Technical Apparel." Under Armour is doubling down on non-casual gear and its leaders made it clear on CNBC:
CEO/Baltimore-legend Kevin Plank: "It's all performance."
COO: Under Armour is "becoming a louder brand." Point taken.
This is purely anti-Lulu... On our Snacks team's unofficial "apparel spectrum," here's where Under Armour falls:
"Leisure" (one extreme): Chill apparel brands from Vans to Sperry. Nothing athletic about it. Under Armour has no interest.
"Athleisure" (the middle): The $350B global market is dabbled in by Nike, but dominated by Lululemon. Under Armour doesn't want to fight for market share from the existing leaders.
"Technical Performance Apparel" (the other extreme): Under Armour wants to own this — the more high-performing and intense it gets, the more UA separates itself from Nike, Outdoor Voices...and Lulu.The Takeaway:But UA does love Lulu's brand moves... Under Armour also announced it's doubling its physical stores to 2.5K by 2023 — and they won't discount. Currently, a shocking 90% of its locations are outlet stores. Under Armour is jealous that Lulu controls its own locations — that lets it maintain a full-price, discount-free, premium brand status. Jul 12, 2019 Lululemon opens 25K-square-foot everything store in Chicago for sweaty people Read More Swanky hotel + gym + Lululemon... (with a hint of WeWork). Execs at Lululemon said "yes" to any ideas that could be thrown into its new 25K-square-foot store in Chicago's Lincoln Park. Opening day was yesterday (we were curious). The 1st floor's your standard retail merch (from her stretchy pants to his joggers). But on the 2nd floor, things get transcendental:
Work your body: There's a studio for yoga and another for HIITs (high intensity interval training). Plus, Equinox-quality locker rooms to un-sweat yourself.
Work your soul: A 3rd studio (surprise) for meditation.
Work your mind: Workspace to flip open your laptop when the post-workout endorphins kick in.
Fuel yourself: Then there's the clean-eating menu at the new chef-designed, influencer-consulted restaurant, called "Fuel".
Faux-industrial, succulent-infused, minimalist decor... But Lulu means business. There are 50 classes per week at $25 each. They're designed to generate sales — You can try on clothes through an entire yoga flow class, then not buy them. And it's planning to expand: by 2023, Lulu wants 10% of its locations to be this new breed of everything store.The Takeaway:Offer something Amazon can't... That's been the strategy of retail companies thriving despite the retail-pocalypse around them. These physical dream-stores whipped up at Lulu's v2.0 spot are packed with an experience online shopping can't replicate. Apr 25, 2019 Lululemon reveals 5-year plan: sneakers, shampoo, "sweatlife" Read More No time for shavasana... Lululemon was busy revealing its 5-year strategic plan, heroically christened “The Power of Three.” It began with a humble brag ("we've already delivered on several 2020 goals") and then focused on three big new ones — two are huge, one is surprising:
"Product innovation": Lulu's designing its own sneakers this year and expanding its khaki-infused office/travel/commute wear.
"Market expansion": Double its men's business (see khaki reference above), double online sales, and quadruple international sales. Ambitious.
"Omniguest experience": This one intrigued us. More below.
"Sweatlife" is why you athleisure... Lulu's calling us "guests" instead of customers. The omniguest element of its master plan is about transforming beyond stretchy cloth into “an experiential brand for people living the sweatlife.” Sweatlife looks like this:
Lulu shampoo, deodorant, moisturizer, and other self-care bathroom shelf-stuffers through partnerships (SoulCyle is partner #1).
A new 25K-square-foot mega-store in Chicago with meditation space, yoga studios, and a juice bar. It's so big you'll lose yourself (and then find yourself).The Takeaway:It all comes down to sales channels... Lululemon owns them. Yes, you can find its high-rise yoga leggings on Amazon. But Lulu mainly sells directly through its own website and stores. No retail middleman means more profits namastaying with Lulu. Mar 28, 2019 Lululemon surges 11% on man-pants focus Read More Set an intention... The Vancouver-based team over at Lululemon did for 2018. And it worked. Quarterly sales surged 26%, making last year one of its "strongest yet." Lulu's focus for the future is to blossom into a "dual-gender" brand.
Man's best friend... is a pair of sweat-wicking, technical khakis with a hidden back pocket. Lulu's CEO straight up called out guys as its "most exciting" area of growth:
Turns out "men's bottoms" have become "extremely profitable."
So Lulu signed NFL QB Nick Foles to be its first male ambassador of squat-worthy pants (FYI, he prefers the title "elite ambassador" and is now really into the hashtag #thesweatlife).
And since Lulu only owns 20% of the male workout market currently, it's very, very into this.The Takeaway:"Work-leisure-wear" is now a thing... Goldman just rolled out a “firm wide flexible dress code” JPMorgan's been tie-optional since 2016. So Lulu's thinking beyond its vinyasa gear to daily uniform options of a suit-free office future.