Dive Brief:
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During a conference call with investors last week, Lululemon Athletica Inc.’s management made little mention of its plans for growth. The company had previously announced that Q4 same-store sales fell 2%.
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“A detailed constructive strategy, beyond the improved product, not just words, is needed to rebuild the aspirational quality of the Lululemon brand,” investment analyst Sam Poser of Sterne Agee wrote in a note. “Most of those who do not see the brand as damaged are loyal Lululemon customers, but new customers are needed for the long-term success of both the company and the stock.”
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In brighter news for the company, a shareholder suit against the yoga-gear retailer over last year’s quality issues was dismissed, in a ruling that called the problems possibly a result of corporate mismanagement, but not securities fraud.
Dive Insight:
While Lululemon arguably set the standard for quality and design of athletic wear (despite last year’s quality issues) and an example through many of its ambassador policies, it can’t afford to fall behind now. Competition in the activewear segment is possibly the most swift and intense of any in retail at the moment. It doesn’t really matter anymore how pioneering Lululemon once was; those days are gone.