Athleisure brand Lululemon is facing growth challenges amid the changing market landscape and growing demand for competitor brands, according to reports.
The brand has witnessed a downward sales pattern in recent years and has reported the lowest quarterly growth in four years. Lululemon is likely to see a 7 per cent rise in its third quarter of the current year compared to the 19 per cent rise recorded in the previous year’s third quarter. In addition to this, the shares of the brand have dropped by 33 per cent this year.
The brand caters to men’s and women’s clothing including loungewear, activewear and footwear. Once known for its high-end yoga pants, the brand is now being questioned on its outdated designs and saturated patterns.
Lululemon’s sales are lagging behind rivals like Alo Yoga and Vuori, which are attracting younger customers with a more frequently refreshed styles and designs. Celebrities like Kendall Jenner and Taylor Swift, previously seen in Lululemon gear, have been spotted sporting outfits from these newer brands.
Data shows that newer brands are outperforming Lululemon in terms of store visits as well and are placed in the near proximity of the brand’s brick-and-mortar outlets. Additionally, Gap-owned Athleta is experiencing a resurgence with its more on-trend collections, further squeezing Lululemon’s market share.
Lululemon’s North American business has been hampered by product missteps. Inventory issues with women’s apparel, coupled with a lack of exciting new designs across core and seasonal styles, have led to sluggish sales, reports revealed.
The recent pullback of the “Breezethrough” leggings due to customer dissatisfaction with the design highlights these challenges, as per reports.
Analysts believe Lululemon may have reached a saturation point with its core customer base. Attempts to broaden its appeal with products like flannel shirts and limited-edition collaborations haven’t translated into significant sales growth. This diversification could even alienate their core customer base who may feel less catered to.
Newcomers like Vuori and Alo are aggressively expanding their store footprint, strategically targeting locations near existing Lululemon stores. This tactic increases their visibility and targets Lululemon’s customer base directly.
