Lululemon targets men's wear for future growth
Yoga and workout wear company Lululemon Athletica has unveiled plans to gain market share within the men's wear industry by making a substantial investment in the sector.
Speaking at the 15th Annual ICR XChange Conference in Miami on Wednesday (16 January), CEO Christine Day said: "The next opportunity is men's and I think for Canada in particular, this is an enormous growth lever for us."
A little over a year and a half ago, men's wear represented 8% of Lululemon's sales according to Day. In the year-to-date, men's wear accounts for 12%, with the holiday season peaking at 15% of sales.
"We know that we are gaining a lot of traction in Canada in men's and you'll see us making a substantial investment in our men's team," Day said.
"We have an offer out to a great GM candidate to run men's...you'll see us make a lot more concerted effort that will drive Canada and the US business."
The news came after the company raised its fourth-quarter sales target to be at the high end of its original guidance of between US$475 and $480m. It now also expects diluted earnings per share for the quarter to be $0.74, compared to its previous guidance of $0.71 to $0.73.
The company managed to avoid markdowns over the holiday season, with less than 2% of its stock on sale or marked down both before and after the holiday period. Day said this strategy of premium brand pricing continues to provide the company with business momentum and strong earnings capability.
Its Ivivva dance and active wear range for girls had an exceptional holiday season, according to Day. "We only had five showrooms in the US but they really drove a tremendous amount of business to our US e-commerce site," she said.
Lululemon Athletica also updated investors on its growth plans - in the US and internationally.
The active wear brand, which operates 211 stores around the world, of which 135 are in the US, said its plan to have 300 in the country is "well on its way".
Day said Lululemon will also invest in an East Coast distribution centre to shorten the replenishment time in stores, which is critical for it to handle volume, the availability of product and drive revenue in stores.
International growth is also on the agenda for Lululemon Athletica, with a focus on growing in Asia and Europe. "We're continuing to push forward on our international strategy," CFO John Currie said.
The company revealed it is in an "intense" search for its first permanent store in Hong Kong.
It also aims to open stores in the UK, Germany and the Netherlands as early as 2014, Currie said.
"2013 will be another year of extending the same strategy, working with showrooms in e-commerce to set the stage for additional store growth in 2014," Currie added.
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