Athleisure Trend Still Has Legs, Just Look at Lululemon  

Many fashion brands are rushing to capitalize on the trend

Author: Andria Cheng

December 7, 2017

There’s been much debate about whether the athleisure trend is losing its sizzle, especially as brands including Nike, Under Armour and Dick’s Sporting Goods have posted slowing or declining sales this year. But lululemon athletica’s latest results suggest the trend still has legs. 

Late Wednesday, Vancouver-based retailer lululemon reported a better-than-expected increase of 8% in Q3 comparable sales—or 7% excluding currency translations impact—led by a 25% constant dollar sales gain online. In fact, the company, which is known for its yoga-inspired athletic wear, has posted consecutive quarterly same-store sales gains over the past four years with the exception of Q1, according to Retail Metrics data. The retailer also expects healthy sales growth this holiday quarter.

These results and forecasts “help to disprove athleisure concerns,” said Morgan Stanley analyst Kimberly Greenberger in a report Thursday.

Retail Metrics president Ken Perkins pointed to the success of active and athleisure lines at retailers like Kohl’s and American Eagle Outfitters' Aerie brand. Athleisure “still appears to have some legs,” he said.

But the question isn’t really about whether the athleisure trend is over. Rather, it’s about which retailers are speaking to customers in the right way, not just in terms of products.

“The retail landscape is experiencing unprecedented disruption characterized by increasingly commoditized transaction and short-term focus,” lululemon CEO Laurent Potdevin said in a conference call on Wednesday. “Across the globe there was a behavioral shift to [live] an active mindful lifestyle. Guests are drawn toward the brand focus that reflects who they are and who they want to be.”

As more retailers seek to feature experiences in the store to engage shoppers, lululemon—a pioneer of free, in-store yoga classes and a brand ambassadors model that has been replicated by other athletic fashion retailers—has continued to attract consumers through new variations and localized experiences, one example being its “Mindfulosophy” meditation space in its New York flagship location.

Potdevin said the company’s vertical integration also marks a core competitive advantage that gives it end-to-end control of every aspect of its business—a trend more brands are moving toward. From Nike and Under Armour to Michael Kors and Ralph Lauren, brands are increasing their direct-to-consumer business, or seeking to cut reliance on retailers like department stores that are traditionally known to use sales to drive demand. 

“Retail must be omnipresent,” Matt Powell, analyst for The NPD Group, said in a company blog post Tuesday. “Omnipresent retail has one price, regardless of where the sale is completed. That price must be transparent, matching any other competing price in competitors’ or brands’ sites.”

With many fashion brands rushing to capitalize on the athleisure trend, that has also created a glut of brands plugging performance apparel when they have no history of doing so, in turn hurting traditional performance-oriented brands and retailers, Powell said in a post in August.

“[There’s] no indication that the athleisure customer is spending their money on other footwear and apparel,” he said.

On Black Friday alone, for example, lululemon’s Fifth Avenue store in Midtown was one of the busiest, despite the company not having a Black Friday sale for its nonclearance, regularly priced merchandise.

Additionally, lululemon’s latest results show that the athleisure trend is not just limited to female customers. While Q3 women’s comparable pants sales surged 24%—largely thanks to its new Everlux four-way stretch fabric line—the company saw sales double for its expanded ABC men’s pants line. And helped by its first-ever men’s marketing campaign, new male customer transactions rose 21% in Q3, the company said, while comparable sales of men’s pants and other bottoms jumped 26%. 


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