Case Study | How Lululemon Built Athleisure’s Leading Brand

As many of the style world scrambled to outlive an apocalyptic downturn introduced on by the coronavirus pandemic, activewear label Lululemon’s share worth rose to an all-time excessive final month.

The originator of expensive yoga leggings, and different activewear that always doubles as daywear, has been an early winner of what’s anticipated to be a years-long financial crisis. Shoppers caught at house are still in the market for flattering comfort clothes, just like the model’s velvety-soft “Align” leggings, which some prospects gather by the handfuls.

The present state of the world solidified Lululemon’s place on the prime of the athleisure totem, a pattern the corporate all however created, and which fuelled its development during the last twenty years. It has underscored the corporate’s achievement of a uncommon and elusive prize: enduring model worth.

However Lululemon’s rise to the highest of the burgeoning activewear sector — with the sports activities attire market projected to prime $200 billion this 12 months, based on Euromonitor Worldwide — has not been with out its challenges. Progress has been marred by successive scandals over high quality, tradition and management that broke simply as opponents muscled in on the corporate’s house turf with look-alike merchandise at cheaper costs. Its yoga leggings grew to become part of an ubiquitous uniform that additionally included Uggs and a Starbucks cup, derided by some as a method to sign health with out really exercising and teetering getting ready to style irrelevance. (The look earned the derogatory time period “primary bitch,” adopted by critics and satirists throughout the web.)

However love for Lululemon remained robust amongst core prospects — who proudly wore their leggings within the studio and out — who swear by the consolation, efficiency and magnificence they provide. The maverick management of Founder Dennis J. “Chip” Wilson had helped Lululemon set up a sticky sense of group that also endures. It’s been a extremely efficient device to maintain and develop the model’s power despite turmoil on the prime. On the similar time, the corporate has at all times eschewed wholesale and reductions, defending it from a few of the retail disruptions of the final decade, whereas its give attention to technical design helped it retain some differentiation as opponents piled into the burgeoning marketplace for athleisure.

Early adopters’ behavior of carrying their Lululemon leggings to brunch turned out to mirror a deeper, longer-lasting way of life pattern, not only a fleeting style pattern. Certainly, now it is simply the way in which folks costume, notably in a work-from-home period the place consolation is king.

At present, because the coronavirus continues to upend life, work and the financial system, the corporate now seems among the many best-placed attire retailers on the planet. Whereas the style trade as a complete is dealing with a bleak outlook, demand for activewear has remained comparatively sturdy. The model ranked amongst The Monetary Instances‘ top 100 companies prospering in the pandemic. It has added roughly $10 billion to its market capitalisation this 12 months.

Lululemon shouldn’t be proof against the present market uncertainty, in fact. Sales fell 17 percent in its fiscal first quarter. Although most of its shops affected by pandemic-induced lockdowns have now reopened, the prospect of getting to shut once more in sure places stays very actual. Its share worth is off the all-time excessive reached final month and, like the remainder of the style world, it should discover a method to navigate the recent give attention to structural racism and a scarcity of inclusivity inside the trade — an space the place the model has had its share of missteps previously.

BoF’s newest case research examines how Lululemon constructed the world’s main model in a brand new class, and the place the corporate goes from right here.

Click on under to learn the case research now.