Lululemon Will Focus On Digital Pformation In The Future

Facing the competitive sports market, the main players

Canadian brand of equipment

Is going out of the trough.

According to the world clothing and shoe net, Lululemon (NASDAQ:LULU) sales increased by 14% to $619 million in the three months to October 29th, while operating profit decreased by 8% to 85 million 600 thousand US dollars, representing a 2% increase over sales, including

Retail sales, including sales, increased by 26%.

During the period, Lululemon's subsidiary line Ivivva shut down many offline stores and turned to online channels. The related duplication cost increased by 22 million 200 thousand US dollars, which is the main reason for the decline in operating profits. The Group expects that the restructuring cost will reach US $50 million this year.

Lululemon was founded by founder Chip Wilson in 1998 in Vancouver, BC, specializing in the sale of Yoga sportswear.

Some analysts believe that Lululemon is one of the most successful business myths in North America.

With the help of the idea of precise market positioning and the promotion of healthy living concept, Lululemon has emerged from many sportswear brands in a short time and has become the first choice of sportswear brands for young women in North America.

CEO Laurent Potdevin said in a conference call after the earnings announcement that Lululemon will focus on digital pformation in the future.

After Lululemon opened its flagship store in Tmall, its sales in China increased by 350% over the same period last year.

He also stressed that Lululemon will explore new retail outlets with Alibaba to better expand the brand international market.

He also revealed that at the end of the quarter, Lululemon will launch a new website and plan to provide Yoga activities at the physical stores to enhance the cohesion between brands and consumers.

At the same time, Lululemon is also accelerating the retail network under the layout line.

After shutting down some of the bad stores, Lululemon's sales performance in the North American market is improving. Laurent Potdevin revealed that with the advent of the holiday season, Lululemon recorded its best sales performance on black Friday and web Monday.

By the end of the reporting period, Lululemon has added 26 stores in the United States, 4 in Canada, 3 in Europe, 3 in Australia and New Zealand, and 10 new stores in the most promising Chinese market.

Laurent Potdevin stressed that the global fashion retailing industry is undergoing unprecedented changes, characterized by ever more similar business models and focused revenue breakage.

However, challenges also mean new opportunities. Lululemon, as the leading brand in yoga apparel brands, can take this opportunity to reformulate industry rules.

While North American leisure sports are gradually ebbing, China's sports apparel industry has been developing rapidly in the past three or four years, attracting many high-end sports brands.

For Lululemon, the Chinese market is very important.

Laurent Potdevin admits that it is hard to predict when the Chinese market will mature, but Lululemon's products can be excited by the cover of China's fashion bazaar magazine. "This has not happened in North America."

He said that with the improvement of Chinese consumers' awareness of healthy lifestyles, Lululemon will further expand its business scale in the future.

Stuart Haselden, chief operating officer and financial officer, predicts that sales of Lululemon will reach $4 billion in 2020. Lululemon has always regarded men's products as a new growth point. Lululemon is the most unknown secret for us. "Laurent Potdevin" expects Lululemon men's clothing to achieve annual sales of 1 billion dollars in less than two years.

In the face of the accession of powerful competitors such as Amazon and Nike, Laurent Potdevin said the brand will remain vigilant in the future.

At the investor conference held at the end of October, Nike formally announced that it will officially open the sports pants' monopoly area "pant studios" in its 5000 stores, and officially launch the Yoga market.

Nike management has said that with the increasing popularity of sports equipment, tights will become new jeans.

In addition, Nike will also launch sports bra products to challenge Lululemon, the leader of Yoga equipment.

Trevor Edwards, President of Nike brand, revealed that more and more women took part in physical exercise in Nike sports and leisure wear with annual sales volume of US $7 billion.

According to analysis, the latest action of Nike will pose a threat to Lululemon, which has only 421 stores in North America.

It is noteworthy that Lululemon executive vice president and creative director Lee Holman will leave in December 31st for personal reasons.

Under the leadership of Lee Holman, Lululemon has been the leading brand in the Yoga market in the past three years.

Laurent Potdevin stressed that the departure of Lee Holman does not mean that Lululemon will change in product design and marketing. The brand has already worked out the development plan for 2018.

Since the position of creative director is very important, Lululemon will choose the successor of Lee Holman carefully.

In addition, R e mi Paringaux will join Lululemon as the brand director. After taking office, she will create more creative marketing content and experience for Lululemon.

R e mi Paringaux has rich experience in digital media. He is the founder and creative director of Meri Media in London digital institution, and is responsible for developing online advertising, mobile application terminals and magazine content for Gucci, Stella McCartney, Comme des Gar C and so on.

In view of the positive growth of the group's performance, Lululemon decided to increase its performance expectations for the fourth quarter and the whole year. It is estimated that sales in the fourth quarter will be between 870 million and 885 million dollars, and the annual sales volume will be about 2 billion 600 million dollars.

After the release of the earnings report, Lululemon shares rose 6.78% to $72.25 a share, and the market value was about $9 billion 160 million as of yesterday's close.

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