You needn't be a tart to sport lululemon athletica attire. The company designs and sells yoga-inspired apparel under the lululemon athletica and ivivva athletica brands to the limber and athletically hip. It operates 175 company-owned stores primarily located in North America. The rest are in Australia and New Zealand, where lululemon operates through a joint venture. While it specializes in making women's clothing for yoga, dance, and running, the company also offers men's apparel. Third-party, mostly Taiwanese, vendors make its apparel, which is distributed from facilities in Canada, the US, and Australia. The company was founded in 1998 by Chairman Dennis "Chip" Wilson.
Lululemon's sales have soared along with the growing popularity of yoga and its brand -- from about $40 million in 2004 to more than $1 billion in fiscal 2012 (ends January) -- despite an economic downturn that conspired against the company. The apparel retailer logged its most recent revenue leap from $711.7 million in 2011 (a 41% increase) by opening more than 40 new corporate-owned stores in North America, Australia, and New Zealand. During fiscal 2013 lululemon plans to open up to 30 namesake stores in the US and five in Australia and New Zealand. It also plans to expand in Canada with two ivivva-brand stores.
The company's rapid growth has been fueled by adding new stores, growing online sales, and achieving double-digit same-store sales. To this end, lululemon continues to focus on developing its direct-to-consumer sales channel. Since launching its retail website, direct sales have grown to account for 11% of lululemon's total, up from 8% in 2010 and 4% in 2009. To further drive website sales, the company is investing in its information technology systems in 2012 to improve efficiencies and bring its legacy systems up to speed, while also developing country-specific websites.
It may have a Vancouver address but the yoga outfitter has been cultivating some deep roots in the US. Just two short years ago, lululemon derived 60% of its revenue from its Canadian retail operation; today its home country brings in 43%, ranking second to the US. During the same time frame, the US has grown to become lululemon's biggest revenue source with 53%. Thanks to the company's joint venture in Australia, the apparel company has doubled its sales there. The company has spurred growth outside North America by boosting its ownership stake in New Harbour Yoga, its joint venture partner in Australia, from 13% to 80% in 2010. Beyond North America, lululemon is looking to the Asia/Pacific region and eventually Europe for expansion. (The company has a showroom in Hong Kong.)
Granted, most of lululemon's sales are to women, but the retailer is working to attract men as well, as more males are participating in yoga to stay fit. It's enticing men by marketing the "technical rigor" of its products. Aging Baby Boomers looking to adopt a lifestyle focused on longevity is another gain for lululemon. The apparel maker also concentrates on developing its ivivva dance-inspired line targeted to dancers and gymnasts age 6 to 12 years. Part of this strategy includes adding company-owned stores under the ivivva banner; it currently operates five.
Founder Wilson owns about 30% of lululemon's shares, while investment firm FMR LLC owns about 14%. – less