Retail brands like Nike, Gap, and Nordstrom are looking to duplicate Lululemon’s sales efforts.  Lululemon was founded in 1998 by Chip Wilson in Vancouver, Canada after he took a yoga class and found that there was no clothing appropriate for yoga.  Since then, the company has grown at an exponential rate.  Lululemon has had a compound annual growth rate of 52.3% from 2005 to 2009, and are expecting revenue for fiscal year 2011 to reach almost $950 million.

With U.S. sales of women’s athletic clothing rising 2.6% last year, the athletic apparel market is very competitive.   Other retailers are trying to grab a share of this growing market.  Lululemon sells activewear at a higher price point than other retailers. Yoga pants, for example, average $98.00 per pair. Lululemon, once a pioneer in the field of women’s athletic wear is now facing stiff competition.

Gap’s brand, Athleta, competes with Lululemon but offers a more affordable alternative.  Nordstrom’s launched the Zella line of athletic wear to capture some of Lululemon’s customers. Nike is trying to duplicate Lululemon by developing a yoga culture that makes consumers feel that they are part of a community. Nike has been successful creating communities but whether yoga-ites want to have a big name in sports as their community leader or a niche brand like Lululemon remains to be seen.

Trends change as we move out of a time when consumers wanted to be sporty and casual to now wanting to look more professional and spend more money on dressy work clothes. As women switch their discretionary income to dressy work clothes, they may cut back on their Lululemon purchases or opt for a lower priced alternative.

Discussion Questions:

1. Do you think these other retailers can be successful with yoga merchandise?
2. Will consumers continue to spend their income on yoga apparel or focus on other categories of apparel?

Ashley Lutz, “Lululemon Envy Has Retailers From Gap to Nordstrom Chasing Yoga Devotees,” Bloomberg, September 9, 2011.