New CEO and energetic expansion into menswear and everyday wear

Yoga inspired brand Lululemon marked its 20th anniversary with impressive growth in 2018 (+21% in Q3 to £586m) and a new CEO Calvin McDonald. Analysts and investors are predicting this trajectory will continue through 2019, powered by new initiatives such as a loyalty scheme where for a fixed annual fee customers can choose Lululemon clothing, curated Sweat Classes, free shipping with online orders, and early access to events the company hosts such as Sweatlife Festival. It has been successfully diversifying into product categories outside of its core workout and yoga lines.

Menswear: Its expansion into men’s apparel has boosted revenues significantly, seeing the highest category increase overall. It has been ramping up NPD to tap new growth avenues and has recently launched male golfing attire. It currently relies on over 1,600 ambassadors to tie into its lifestyle positioning, convey its empowering message and create excitement around specific product launches. In 2017 it teamed up with Orlando Cruz, an Olympian and the first openly gay boxer to launch its ‘Strength to Be’ This is a good example of both its empowering identity and efforts to engage more men.

Everyday wear: The brand has also been successful in its expansion gym and workout apparel to everyday wear – the company’s management team has identifies this as a major opportunity. Chief Product Officer Sun Choe pointed to "the intersection of feel, fashion, and function” as a place where “there's a white space beyond the categories that we're known for today."

Digital: We think Lululemon’s appetite for content could make it consider deals with recognisable personalities and brand ambassadors that can be levered across its online channels. Since launching a new website last year it saw a 60% lift in online sales, which now accounts for 25% of its overall revenue. Last year it launched its first global campaign, which highlighted activities from surfing to rapping, but not yoga itself as part of a wider strategy to appeal to a broader demographic. It also invests in thousands of grassroots partnerships with influencers and advocates including apparently medical students.

Loyalty programme: It has been testing a loyalty programme in the US that charges members £100 per year for curated experiences, free-shipping and rewards. The pilot programme has been so successful that it plans to test it in new markets. Its COO said “guests are seeing value beyond just the product”, we therefore expect that as it wants to create better “experiences” and drive life-time value, that it will increase its experiential budget.

Media Spend Q1-3 2018: N/A

Partnerships: SoulCycle, Elle, Canada Running SeriesCSR partnerships including - Better Work, Canopy, Textile Exchange and 100 percent of profits on the UN International Day of Yoga charities that increase access to yoga and meditation for communities that face barriers to well-being.

Key decision-makers:

Director Brand & Community Europe Lindsay Claydon - connect

Event Marketing & Partnerships Manager Nick Mangos - connect