Why We’re Positive on Lululemon
It’s not easy to keep a brand on track in this retail climate without a permanent CEO in place, but Lululemon seems to be doing just that. Continued growth in digital sales and recent moves in China and Europe serve only to strengthen the brand.
Not surprisingly, with continued improvement to its product offering and online experience, JHA is positive on Lululemon for Q1. Here’s why.
Activewear Outperforms Fashion
The wellness market continues to grow more quickly than the global apparel industry overall. Driven mainly by athleisure, health and wellness trends as well as the casualization of the workplace dress code, wellness saw five percent growth in 2017. Lululemon is now at the epicenter of this trend.
According to Active Intelligence, Women’s Gym Tribes by WGSN, the wellness economy is valued at $3.7 trillion. Women’s activewear remains key to this growth.
Athleisure, a term used to describe clothes that are inspired by performance gear, will grow more quickly over the next five years than any other subcategory. Athleisure is often made with the same fabrics used for traditional workout wares, but not solely intended for physical activity. It’s expected to surpass $31 billion in sales by 2022.
By designing clothes for everyday life, Lululemon seems poised for success.
Lululemon Steps It Up in Stores
In Q1, JHA continued to note improvements with Lululemon’s in-store experience and merchandising. The brand opened two new stores - one in Seoul, their fourth store in the region, and another in Mexico City, showing strength in their ability to maintain a growing retail presence.
We also noted a higher percentage of Lululemon casual wear to be worn on the street both in-store and online that serves the Athleisure trend.
Lululemon, Flat Iron NYC
New Designs and On-Trend Product Introductions
Lululemon’s product has more design detail than we’ve seen in previous seasons. We noted a more sophisticated design and a more seasonal color palette in the product offering.
In a forward-looking step, Lululemon teamed up with pro surfer Malia Manuel to launch a three-piece swimwear collection. The collection will target the surfing industry that is expected to explode to $9.5 billion by 2022. Earlier, the brand released new men’s swimwear product designed with direct feedback from pro surfers and elite ambassadors Evan Valiere and Mark Healey.
We also found a strong bathing suit collection with trending silhouettes apart from the surfer collaboration. Once again, Lululemon exhibits an ability to stay on-trend.
A Healthy Social Media Effort
Lululemon saw a slight uptick in Instagram followers to 2.4 million. The brand features trendier silhouettes on Instagram as well as the website – more fashions for the street than the gym.
The content aims to keep fans informed about new, shoppable product. Fans can also connect via events, which is a focus as well. Lululemon is also active on YouTube with 48 thousand subscribers.
Online Experiences Improve
The product is curated by story or occasion, such as Love Shop and Office, Travel, Commute on the website. While Lululemon doesn’t have BOPIS, consumers can check the availability of a product at the store closest to them.
The Lululemon app is expanding. For example, a community area on the Lululemon app allows consumers to follow classes. This is similar to a feature on the Nike app. Also, customers can contact the store through the app to reserve items.
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