Athletic Apparel Company – Lululemon

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Lululemon Athletica Lulemon Athletica is an athletic apparel company based out of Vancouver, British Columbia, Canada. The company was founded by Dennis “Chip” Wilson, in the year 1998. Dennis Wilson had been in the skate, surf, and snowboard business for over 20 years when he took a commercial yoga class that was offered in Vancouver. Wilson found the results to be thrilling. He quickly was immersed in the idea of making his yoga experience the best possible. He believed the clothes that were being used for yoga were not the most appropriate.

They made him sweat and weren’t very easy for the maneuvers yoga required. This would lead to the beginning of Wilson’s success. From Wilson’s passion for athletic fabrics, a design studio was born, which at the same time operated as a yoga studio at night, to help pay for expenses. Wilson offered clothes for sale, which led to the birth of a yoga clothing movement. Insight was provided from yoga instructors, who were asked to wear the products. The positive insight, mixed with Wilson’s drive, would be the necessary factors for the creation of a new company.

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Various names were reviewed but none seemed to make the grade. A survey of 100 people was setup, including 20 logos and brand names. The logo which was chosen was a letter “A” which came from the name “Athletically Hip”. The latter would be ditched. Lululemon Athletica would be chosen to replace the original company name. The first store opened in November of 2000 near the beach area of Vancouver. The goal in mind was to create a healthy living community, where one could walk in and learn and discuss, as well as shop.

This method created a more welcoming experience for the customer, however, it made it nearly impossible to help the customer this way on top of selling the products. Educators were then added to the staff, who were trained so well that they could influence their own families, communities, and most importantly the customers. This success of this company method was great, which would open the doors for expansion. Wilson’s initial goal only had one store in mind. However, it was obvious that with such success and demand, new stores had to be opened.

These expanded with time and as of October 2012, Lululemon runs approximately 201 stores. These include locations in North America, as well as Australia and New Zealand. It also has showrooms in Great Britain, and in Hong Kong. Lululemon is also sold at fitness studios including CorePower Yoga, Physique 57 and more. Lululemon also has a subsidiary which targets girls between the ages 6-12 called, Ivivva Athletica. As of October 2012, Ivviva has 14 locations, mostly in the United States and Canada.

Clothes are designed with input from dancers, gymnasts, and ice skaters, marketing primarly for the active teenage girl. Dance classes are even provided weekly at their locations. In 2005, Advent International, a private equity firm, bought 48% minority interest for $225 million. This left Wilson with 42% ownership. Robert Meers, former CEO of Reebok, became the new CEO of the company. Lululemon Athletica became a public company on July 27, 2007 after announcing a public offering in May of that same year.

Lululemon Athletica is now a public company with a revenue of US$ 1 Billion as of 2012. It employs 2861 employees within 3 divisions which include OQOQO and Ivivva Athletica. Lululemon is a clothing line for yoga athletic clothing. It’s a brand/store that people don’t hear of much, but it’s a high-end type of athletic-wear market. Since this store was to help women to be and get more athletic, it sold good quality yoga clothing that was just in fit and comfortable for the body of women. However, they do sell athletic wear for men, too.

It has over 201 stores spread in Canada and North America. As for political terms, child obesity is on the rise and cost of healthcare may be unaffordable. Parents should get their kids to do more extracurricular activities so they can have healthier lifestyles and thinking. Since this store is Canadian, it’s economic analysis surrounds around Canada. Department of Finance Canada (2009) states Canada has been significantly affected by the global recession and Canadian economy growth began to slow in the fourth quarter of 2008. Real GDP declined by 3. 7 percent in the fourth quarter of 2008.

Although Canadian economy is being affected by the global recession, the Canadian economy is still better than other industrialized countries (CMA Business Case) When it comes to a social aspect, Lululemon is becoming an increasing trend: a result of consumer approval. The company does take hits though for its return policy and many people feeling that their staff is not very friendly. The media took blows on the company when there was a murder that took place at one of their stores and the conflict was between two of the employees(Lawrence). They are seen as having sustainable development and being environmentally friendly.

They are also conforming to demographic changes and developing lines for men and youth. As for a technological aspect, they are praised for their several forms of social media and keeping customers up to date as well as their up keep of fashion trends(MBASkool). SWOT Analysis: Strengths: * Retail Company is growing- its direct-to-consumer business grew from 8%-11%, went from 155 stores before 2012 to over 200 today. * There’s room around the globe to produce more stores and make more profit. * High quality products- good fabric and fitted for all types of bodies. Employees are well-trained; create a vision for their ideal life and set personal, health, and career goals to achieve their vision and it gets passed to their customers. * Employees create good relationship with costumers. * Community-centered marketing approach- builds brand awareness, relationships, and philanthropic activities. * Sustainability * Online store Weaknesses: * Brand recognition in the U. S is weak * May not be a consumer’s consideration yet. * Higher pricing than competitors * Company growth is slow because there isn’t enough stores spread out in U. S * Main focus is on women Perceived as yoga only * Inventory * Competitors are more affordable Opportunities: * International Expansion -Steadily making its way to new markets including Hong Kong and London. * E-Commerce Development * New Market Segments -Men and youth * Women becoming more active * Market driven by a healthy and active lifestyle Threats: * Decreased consumer spending due to economic conditions -High prices may hurt buyers in rough economic times. * Small U. S. Market size -There is a lack of focus on health in the U. S. Market * Fashion trends constantly changing * Large competition From discount to high-end, everyone is emerging with athletic wear(Huang). Lululemon Athletica is big on their social responsibility aspect. They believe that by helping people create healthy minds and bodies that this will also inspire the personal growth of their consumers. For example, at some locations they have a yoga class followed by a beach clean-up. They also offer a women empowerment program as well as working very hard to reduce shipment waste(Lululemon). Lululemon Athletica has come a long way from opening one store to now having over two hundred globally and continuing to expand.

They also started off as solely women’s clothing and are expanding to clothes for the whole family and well as branching off into another brand, Ivviva. Politically, economically, socially and technologically they are constantly growing and improving. They have several strengths and opportunities on their side with only few weaknesses and threats, those in which every company deals with such as competitors. Lululemon also prides themselves on giving back and have a great social responsibility. Overall, Lululemon is a very stable brand making its way to being a household name and will continue to grow, expand, and improve.

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