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Lululemon Athletica SWOT & PESTLE Analysis

ID : 52691753| Sep 2020| 15 pages

COMPANY PROFILE -Lululemon Athletica

Business Sector :Athletic apparel retail

Operating Geography :Canada, North America

About Lululemon Athletica :

Lululemon Athletica sells technical apparel for yoga, running, training and other athletic pursuits. The company was founded in 1998 with headquarters in Vancouver, Canada. It was founded with a vision to create a community for people to learn and discuss healthy living, mindfulness and living a life of possibility. The company desires to empower people in reaching their full potential by providing the right resources and tools. Core values are: quality, balance, integrity, product, entrepreneurship, fun and greatness. It has won the 2019 Forbes Retailer of the year award, defeating Walmart and Target. The company has approx.19,000 employees as of February 2020.
Lululemon Athletica’s a vision is to be - The experiential brand that ignites a community of people through sweat, grow, and connect, which we call "living the sweatlife."

Lululemon Athletica Revenue :


$3.29 billion (FY ending February 2, 2020) (YoY growth 21%)
$3.29 billion (FY ending February 3, 2019) (YoY growth 24%)
$2.65 billion (FY ending January 28, 2018) (YoY growth 13%)
$2.34 billion (FY ending January 29, 2017)

Competitive Analysis of Lululemon Athletica

SWOT
PESTLE
The SWOT analysis of Lululemon Athletica is presented below:
Strengths
Weaknesses
1. Market leader in yoga and workout clothing for women in North American markets
2. Control of both production and distribution aiding margins and customer loyalty
3. Strong operational performance and goal delivery ahead of schedule
4. Niche focus that enables sale of high demand products at premium price
5. ‘Power of three’ strategic plan for growth
6. Leveraging the power of communities for marketing
1. Weakening retail base in USA
2. Association of brand with women’s clothing despite increasing focus on men’s wear
3. High dependency on a small number of suppliers
4. Series of controversial remarks and scandals by CEOs
Opportunities
Threats
1. Athleisure becoming a mainstream trend across the world
2. Growing health and fitness market in Europe
3. Expanding reach through collaboration
4. Category expansion in women’s core segment and accessories through solving unmet needs
1. High competition from established players and new entrants
2. Reduction in discretionary spending due to economic downturns
3. Inability to anticipate consumer preferences
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Detailed SWOT Analysis of Lululemon Athletica

 

Strength

1. Market leader in yoga and workout clothing for women in North American markets: Lululemon has achieved market leader position in yoga and work out clothing for women in the North American market. The company is credited as the pioneer of the athleisure apparel trend that has seen huge growth in recent years. Since Lululemon sold the first pair of yoga pants in 1998, it has come a long way, riding the athleisure trend and posing a serious threat to the jeans industry in the process. People have started wearing yoga pants even to the office, which has increased the usage of Lululemon’s products. The company invests a significant amount of money to develop new fabrics trademarked fabrics for fending off rivals. The Luon fabric was trademarked in USA in 2005. The newer fabrics developed by the company like Luxtreme, Nulux and Silverescent are branded and geared for specific uses.

2. Control of both production and distribution aiding margins and customer loyalty: Lululemon is able to enjoy expanded margins and new opportunities because of its control over both production and distribution. Lululemon has avoided the common retail practice of selling its product in department stores. This has helped build customer loyalty and gave the company better control over discounts, pricing and marketing. In contrast, companies selling through third parties have to share margins. Lululemon sells high margin apparel, priced at $100 or more, through physical stores as well as on the website. In 2019, the physical stores contributed 62% of the revenue whereas 28% of revenue came from the website.

3. Strong operational performance and goal delivery ahead of schedule: The company delivered strong operating results in 2018, with revenue increasing by 24% and adjusted earnings per share increasing by 48%. Gross margin was 55.2%, e-commerce penetration was 26% and operating margin was 21.5%. This growth was driven by multiple successful initiatives like store openings in new and existing markets across the world, strong performance in China, positive customer response to product innovations and strong digital platforms. Many of the goals set for target 2020 were met ahead of schedule, setting the stage for a new five-year vision for the future. In 2019, the company continued its growth. Revenue grew by 21%. Operating margin increased by 80 basis points to 22.3% and earnings per share grew by 37%.

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Weakness

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Opportunity

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Threat

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Major Competitors :

Major Brands :

  • Lab
  • Lululemon
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Check Out Analysis of Other Relevant Companies

TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Lululemon Athletica Analysis Report

1. Lululemon Athletica 2019 Annual Report - https://investor.lululemon.com/index.php/static-files/8df91f4d-25a1-4e69-8b94-606f9c370440

2. Annual report 2018 - http://investor.lululemon.com/static-files/2ae3c99b-e92f-4bd6-aa73-e46f6bce7166

3. Athleisure Market Outlook – 2026 - https://www.alliedmarketresearch.com/athleisure-market

4. lululemon athleisure company profile - https://www.reuters.com/companies/LULU.O

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SWOT & PESTLE.com (2020). Lululemon Athletica SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/lululemon-athletica/ [Accessed 28 Oct, 2020].

In-text: (SWOT & PESTLE.com, 2020)

Copyrights and Disclaimer

Lululemon Athletica SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

Copyright of Lululemon Athletica SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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Lululemon Athletica SWOT & PESTLE Analysis
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