How Lululemon competes with Athleta, Alo, Gymshark, Nike and Adidas

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Lululemon is a multi-billion dollar leader in the premium sportswear category that owns and operates 600 stores, 40 of which are located in Europe. Its roots date back to 1998 when it opened as “Lululemon Athletica”, a yoga clothing brand for women and yoga enthusiasts.

With in-store services, a strong focus on community symbolized by its beloved reusable shopping bags, the brand offers a premium shopping and product experience.

Demand for activewear has grown exponentially since those early days, and in 2022, Lululemon continues to lead the way, with second-quarter revenue up 29% year-over-year. Additionally, the company’s three-year compound annual growth rate increased by 25% for women and 30% for men.

Today’s success contrasts with the challenges it has faced in the past with shaky leadership, product incidents and supply chain delays. For example, Lululemon co-founder Chip Wilson quit in 2013 after a series of inflammatory remarks about his new line of leggings. This sparked a controversy among consumers. Today, inflation is seen as an imminent risk to this double-digit growth.

“The consumer is becoming much more cautious when it comes to spending,” said Neil Saunders, managing director and retail analyst at GlobalData. “And while I think Lululemon’s customer loyalty will keep it in good stead, a slowdown in consumption is bad news for any brand, and it could dampen Lululemon’s growth a bit.”

Nonetheless, the company continues to innovate and diversify into different categories and broader technology offerings. Two years ago it acquired tech and home exercise startup Mirror for $500 million and this year it launched a new membership program. The company also unveiled footwear products for women this year.

These types of initiatives reflect Lululemon’s ambitious five-year plan established in April 2022 with three strategic pillars – innovation, customer experience and international expansion – at its core. Additionally, it aims to double its digital sales and quadruple its international revenue by 2026.

Although its diversification efforts have so far garnered mostly positive feedback, some analysts fear its broader product line could dilute the focus of the brand that was born from humble roots.

Watch the video above to learn more about what makes Lululemon a global leader in athleisure and activewear.

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