Lululemon, whose upmarket leggings and sweatpants have taken affluent North Americans by storm, is eyeing plans to more than triple the proportion of revenues from overseas in an intensified global branding push in countries from the UK to Japan.
In contrast to other clothing companies hit hard by the coronavirus crisis, Lululemon’s market capitalisation has swelled to $50bn this year on the back of higher demand from housebound consumers for athleisurewear — items worn casually as well as for exercise.
As some on Wall Street question whether the yogawear brand — sported by celebrities including Meghan Markle — has peaked in the US and Canada, Lululemon is expanding overseas and also into new products.
The Vancouver-based company generated only 14 per cent of its $1.1bn net revenues from other countries in the three months to November 1. “There’s no reason why that can’t be 50/50 in the years to come,” Calvin McDonald, chief executive, told the Financial Times.
If the ambition was realised, it would expand Lululemon’s international presence significantly beyond its publicly disclosed target, which is to generate $1.44bn in annual sales from overseas by 2023.
Lululemon, which spent $500m in the summer acquiring Mirror, an exercise equipment start-up, is also seeking to increase its popularity among men.
“A large percentage of them are not aware of Lululemon, or if they are they think of it as a female yoga brand,” Mr McDonald said, adding that Lululemon was “broader than just yoga”.
“We’ve evolved away from that for many years.”
The company, known for its leggings that sell for about $120 each, aims to double its menswear revenues to $1.4bn between 2018 and 2023.
Menswear had outperformed for Lululemon overseas, where the brand did not have the same gender associations, Mr McDonald said.
Online yoga classes and virtual workout sessions have helped fuel demand for Lululemon kit during the pandemic. Ecommerce sales accounted for about 43 per cent of the group total in the three months ended November 1.
Yet Lululemon is also expanding in bricks and mortar at a time when other retailers are closing stores. Mr McDonald disclosed that the company, which is set to open about 30 to 35 new stores globally this year, planned a similar number in 2021.
The chief executive said Lululemon was seeking to build on its presence in China, where it has 50 stores, as well as expanding in Japan, South Korea and Australia.
Germany was a “significant continual growth opportunity for us”, as was the UK, where Lululemon competes with Sweaty Betty and has 16 stores from Glasgow to Bath. “We’ll be opportunistic, both in terms of locations and expansion of existing stores, in London and outside,” Mr McDonald said.
About 140 of Lululemon’s 515 company-operated stores are outside North America.
André Maestrini, who joins in the new year from Adidas, will spearhead the international push. Nikki Neuburger, hired as chief brand officer this year, is also making awareness of Lululemon overseas a priority.
In the meantime, Lululemon is facing a resurgence in coronavirus cases in several markets.
The company’s sales dipped at the onset of the pandemic, when all of its stores in North America and Europe were forced to close. Most of its retail locations were open, although the company has had to close some outlets again temporarily. Toronto and London were among the particular coronavirus hotspots, Mr McDonald said.