Atheleisure retailer Lululemon Athletica Inc. wants to clothe more than just yogis as it plans to expand into other sportswear, grow its men's line and produce footwear -- all while anticipating to double and quadruple revenue in certain categories within five years.
"Other than yoga, there's a lot of opportunity to grow the core and expand," said CEO Calvin McDonald at the company's first analyst day in five years held in New York City on Wednesday.
The company's roots are in yoga, he said, but it plans to also create clothes geared more toward runners and people who do strength training. It's identified yoga, run and train as three key categories where it believes it can win.
That means adding more high-support bras in addition to its popular lighter-support ones with strappy backs, for example, and creating more durable, flexible fabrics for the demands of a cross-fit workout, said Sun Choe, the company's chief product officer.
design more frequently for some other categories, like tennis, swimming and hiking, said McDonald, but currently has no roadmap to create specific attire for baseball, football, hockey or soccer.
While Lululemon has traditionally been a women's shopping destination, it sees great potential in men's clothing -- a division where it plans to double revenues by 2023.
The brand will soon launch a new running line dubbed Fast and Free aimed to help men achieve both those feelings with clothing that contains thermal-regulation properties as well, said Choe. The line will include split shorts and singlets.
Growing the men's offering will be part of Lululemon's ongoing product innovation.
The company wants to expand its accessories line as well, which it still sees as a start-up business, said Choe. It will focus on purses, as well as equipment such as fitness rollers and training gloves. Lululemon sees accessories as a way to bring younger people into the brand thanks to lower price points, and to boost sales during the holiday season when people purchase gifts.
Lululemon will also roll out its self-care line to 50 stores this June, said Choe. It initially tested the products, which include a deodorant, dry shampoo and lip balm, at more than a dozen stores in Chicago, Orange County, Calif., and Toronto, and feels optimistic about the opportunity to grow the line.
The company also wants to do more with footwear. In 2017, Lululemon partnered with Athletic Propulsion Labs to sell some men's and women's shoes at select North American stores.
Lululemon learned a lot through that collaboration, McDonald said, in that the category does well in terms of sales and performance.
"We believe we've identified an opportunity that will be unique to us and unique within the marketplace," he said, adding "we are looking to do it ourselves." The company will release more details later.
Executives also touted the company's digital strategy as being able to double digital revenue by 2023.
The company's loyalty membership program, which is currently being piloted with plans to roll it out nationally, will help achieve that goal. The program provides members with access to exclusive products, a personal development curriculum, a dozen fitness classes monthly run by Lululemon ambassadors at local studios and other perks for an annual fee. It is currently being tested in Edmonton and Denver, with plans to launch in Austin, Texas, in May and one more North American market later this year, said Celeste Burgoyne, executive vice-president of Americas retail.
While the company thought die-hard Lululemon fans would make up the bulk of membership, she said the program has proven to be a way to acquire new customers. In Edmonton, 10 per cent of memberships are a customer's first purchase from Lululemon, while in Denver that figure is 13 per cent.
The program is part of the retailer's efforts to build experiences for customers. In this vein, it will open a roughly 2,300-square-metre (25,000-square-foot) store in Chicago this July that will have two studios offering several fitness classes daily, as well as a place to refuel with coffee, juice smoothies and breakfast bowls, she said.
Lululemon's plan to quadruple its international revenue within five years, meanwhile, comes with a focus on China.
It projects its revenues in the country will exceed those from Europe, Australia and New Zealand combined by 2023, said Stuart Haselden, chief operating officer. That potential comes from the country's level of urbanization, as well as its number of online users and millennials.
Lululemon still sees considerable growth potential in Canada and the U.S., but expanding across China and other international regions will continue to be an area of focus.
"We really are in the early innings of our full potential," McDonald said.
