Business history
Lululemon Athletica is a relatively new company, which was founded in Vancouver, British Columbia, in 1998. It was formed to provide sportswear for women, especially for an activity whose popularity began to grow rapidly : yoga. It became a public company in 2007.
The first Luluemon opened in Vancouver, and included a shared space with a yoga studio.
Lululemon Athletica is a relatively new company, which was founded in Vancouver, British Columbia, in 1998. It was formed to provide sportswear for women, especially for an activity whose popularity began to grow rapidly : yoga. It became a public company in 2007.
The first Luluemon opened in Vancouver, and included a shared space with a yoga studio.
With Lululemon yoga is all about. Upon entering the yoga apparel market in its infancy, and tying its brand to an activity that has been revered by many, Lululemon not only able to create a loyalty fierce brand, but also become an integral part of the style yoga General life.
With early and continuous field of Lululemon in the market for yoga clothes, rather than focusing on advertising and marketing of their clothes, they usually focused on promoting a healthy lifestyle, which of course, according to the company involves yoga. Each store Lululemon Athletica offers complimentary yoga classes for guests. The mission statement of the company is "to create components for people to live a long, healthy and fun."
As Lululemon continues to grow, as well as income. For the last reported quarter, revenues increased 37% from the same quarter last year. And it is not only that they have more comparable store sales shop also rose by 18%. This despite the economic downturn. Lululemon margins to cover the costs of any problems. They always run with the gross margin on goods in more than 50% of net sales. Even after subtracting sales and administration, Lululemon can generate revenue of more than 25% of net revenue operations.
During the quarter ended October 28, 2012, Lululemon had net income of over 57 million US $.
Competition
Until recently, Lululemon has managed to almost monopolize a small niche market and this market grow exponentially. However, its rapid growth and the result has been a beacon for others that the market was underdeveloped, and privileged for entry.
Now other companies are beginning to gain a foothold on the market. Companies like Lole, Lorna Jane and Athleta deployment Gap offer products and stores that are very similar to the experience Lululemon Athletica. Yet the well-established brands such as Nike and Under Armour produce yoga more speed. Although they may not have brand loyalty, high margins give competitors plenty of room to compete on price. Many of these companies are already turning big profits, and plan aggressive expansion of its own. To fight against this, the company expands its product profile, offering more clothing for life outside the yoga studio. Does this initiative will help grow Lululemon, or just open the competition? Will they continue to maintain its high margins? Will they continue to increase in the US market, or turn their attention to the European market virtually intact? Investors and analysts are eager to see, but overall, a project that the company's profitability will be reduced to some degree.
Abstract
Lululemon has been able to identify and trap a new market, allowing the extreme growth and profits for years. But now the forces of competition on the free market at work, threatening its dominant market position.
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