Lululemon Case
Confirming Pages
CASE 6
lululemon athletica, Inc.
Arthur A. Thompson
The University of Alabama
I
n early 2012, investor interest in lululemon athletica— a designer and retailer of high-end, yoga-inspired athletic apparel under the lululemon athletica and ivivva athletica brand names—was surging. Over the past 30 months, growing numbers of female shoppers were patronizing the company’s stores to pay premium prices for lululemon-branded items that offered performance, fit, and comfort and were stylish as well. The company’s functional and stylish apparel had taken on
“must have” status among growing numbers of fitnessconscious women. People were flocking to lululemon stores not only because of the fashionable products but also because of the store ambience and attentive, knowledgeable store personnel. The company had responded by opening additional stores—35 in
2010 and 40 in 2011—and embellishing its product offerings to create a comprehensive line of apparel and accessories designed for athletic pursuits such as yoga, running, and general fitness; technical clothing for active female youths; and athletic products for men.
As lululemon’s sales revenues climbed rapidly toward $1 billion annually, the company’s stock price had risen from $2.25 per share on March 9, 2009 to close at $64.58 per share on February 3, 2012. Business analysts were speculating how long the lululemon athletica phenomenon would last and whether the company could carve out a sustainable market position for itself in the fitness and athletic apparel industry against such competing names as Nike, Under
Armour, adidas, and Reebok.
In 2012, the company’s products could be bought at its 174 retail stores in the United States, Canada,
Australia, and New Zealand, and at the company’s website, www.lululemon.com. For the fiscal year ending
January 29, 2012, lululemon reported net revenues of
tho29503_case06_C59-C72.indd C-59
$1.0 billion and net earnings of $184.1 million. Retail store sales
CASE 6
lululemon athletica, Inc.
Arthur A. Thompson
The University of Alabama
I
n early 2012, investor interest in lululemon athletica— a designer and retailer of high-end, yoga-inspired athletic apparel under the lululemon athletica and ivivva athletica brand names—was surging. Over the past 30 months, growing numbers of female shoppers were patronizing the company’s stores to pay premium prices for lululemon-branded items that offered performance, fit, and comfort and were stylish as well. The company’s functional and stylish apparel had taken on
“must have” status among growing numbers of fitnessconscious women. People were flocking to lululemon stores not only because of the fashionable products but also because of the store ambience and attentive, knowledgeable store personnel. The company had responded by opening additional stores—35 in
2010 and 40 in 2011—and embellishing its product offerings to create a comprehensive line of apparel and accessories designed for athletic pursuits such as yoga, running, and general fitness; technical clothing for active female youths; and athletic products for men.
As lululemon’s sales revenues climbed rapidly toward $1 billion annually, the company’s stock price had risen from $2.25 per share on March 9, 2009 to close at $64.58 per share on February 3, 2012. Business analysts were speculating how long the lululemon athletica phenomenon would last and whether the company could carve out a sustainable market position for itself in the fitness and athletic apparel industry against such competing names as Nike, Under
Armour, adidas, and Reebok.
In 2012, the company’s products could be bought at its 174 retail stores in the United States, Canada,
Australia, and New Zealand, and at the company’s website, www.lululemon.com. For the fiscal year ending
January 29, 2012, lululemon reported net revenues of
tho29503_case06_C59-C72.indd C-59
$1.0 billion and net earnings of $184.1 million. Retail store sales