Lululemon, the Canada-based maker of high-end yoga pants and activewear, is facing its slowest quarterly growth in over four years. The company’s shares have slumped 33% this year due to competition from younger brands like Alo Yoga and Vuori.
These upstart brands are attracting younger shoppers with their trendy styles, which appeal to a new generation of fitness enthusiasts. Celebrities such as Kendall Jenner and Taylor Swift have been spotted wearing gear from these brands, further fueling the trend.
Lululemon’s sales growth has stalled, with revenue rising only 7% in the third quarter compared to a nearly 19% jump last year. The company has attributed its slowdown to lower availability of smaller sizes and colors in its key women’s apparel business, as well as a lack of new styles across core and seasonal categories.
To compete, Lululemon is expanding its product category to include items such as flannel shirts and ankle-length skirts. However, analysts say these efforts have not yet translated into significant sales gains.
Analysts also note that the company’s attempt to target younger shoppers by targeting locations near existing stores may backfire. As a result, Luluelemon’s customer base, typically made up of middle- to upper-income people who prioritize fitness, may start to shop at other brands in the area.
The company’s struggles highlight the challenges faced by established brands in the rapidly changing athleisure market. While Lululemon remains one of the leading players in the industry, it must adapt quickly to stay ahead of its competitors and maintain its market share.
Source: https://www.reuters.com/business/retail-consumer/lululemon-faces-sluggish-sales-upstart-brands-nip-its-heels-2024-12-04