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Lululemon’s Connection Is No Stretch


Women willing to pay $100 for yoga pants or $60 for a tank-top have helped Lululemon drive same-store sales up 31%. That’s nearly unparalleled in a soft retail environment where many chains are closing stores, not opening new ones.

The company’s success in yoga wear is a case study on effective brand connection with its target audience. Lululemon, which operates about 300 stores and showrooms in Canada, the United States, Australia and Hong Kong, has tapped into a demographic underserved by athletic brands — women — and competitors don’t want to be left behind.

“Under Armour has been trying for years. They size their yoga pants small, medium, large, and they put them in big sporting goods stores,” says Capstone investments analyst Claire Gallacher. Gallacher watches Lululemon and its competitors for a living. “That’s not where she’s shopping and that’s not how she’s shopping. She buys her size 8 or whatever it is, in an environment that’s comfortable.” This observation is spot on!

Christine Day, CEO of Lululemon, is no stranger to growth companies. She spent over 20 years at Starbucks and watched it grow from its first coffee shop outside of Seattle to a 13,000-store global chain by the time she joined Lululemon.

Lululemon’s success is attributed to a business model that marries fashion with functionality, quality and lifestyle, a grassroots branding strategy unlike its competitors and owning the distribution of its products. Its intimate boutique-style stores appeal to women who want the premium customer service.

Lululemon reaches out to local fitness instructors, driving brand awareness through word of mouth. Their stores and showrooms offer free classes, workshops and community events.

The company’s long-term plan appears solid too. As interest in yoga levels off, it has expanded its offerings to include running wear. It is also dipping into children’s clothing with its Ivivva Athletica line for girls.

Long term looks good for Lululemon. The company has connected with its target audience on several levels. Its continued success is not a stretch from most perspectives.

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