raked in $1.6 billion in net revenue last year, and it
accomplished this without an exorbitant marketing budget or fancy
analytics software. Unlike rival sports-apparel makers
, Lululemon doesn't spend tens of millions on celebrity
endorsements or Super Bowl ads. The yoga-gear retailer instead
relies on grass-roots marketing and community outreach to sell
its products. In addition to generating sales through its
traditional retail channel, Lululemon is capturing sales in other
more subtle ways today.
Inside lululemon athletica's strategic sales unit
Aside from merchandise sold through its 263 stores, Lulu is
driving sales growth through three strategic sales programs:
athletic-team sales, wholesale, and its yoga and hard goods
program for gyms. While the company doesn't disclose what
percentage of revenue comes from these segments, it's nonetheless
encouraging to see Lululemon diversifying its sales channels.
Here's how it works.
Source: Lululemon Athletica.
program enables local sports teams to order uniforms or sports
gear in bulk. "Through the team sales program, we develop
relationships with athletic teams, yoga studios and fitness
facilities that are elevating their communities by being a stand
for health and fitness," according to the company.
In addition to driving bulk order sales, this retail channel
means scores of athletic teams around the country act as
unofficial ambassadors for the Lululemon brand. Last year,
Lululemon supplied all of the shorts and shirts for the
fifth-annual Wall Street Decathlon, as well as uniforms for the
2012 Olympic men's beach volleyball team, according to
Playing in the little leagues
Having an athletic-team sales division is undoubtedly important
for creating brand awareness around Lululemon apparel. However,
the company is still light-years behind both Nike and Under
Armour when it comes to sales to college and professional
Nike dominates the college football scene, outfitting 46 of
the 65 power conference schools this season. Meanwhile, Under
Armour comes in with 12% of the college football market, or eight
of the 65 power conference schools, according to Louisville
Sports. Nike is also the top dog when it comes to the NFL. In
fact, a reported $1.1 billion deal means Nike will be the sole
uniform manufacturer for the National Football League through
Given the tough competition from Nike and Under Armour in the
athletic-teams space, it is a good thing that Lululemon has two
other strategic sales channels in play.
Wholesale, yoga, and hard goods
Lululemon fuels sales within its wholesale program through
partnerships that put its products into gyms, fitness centers,
and yoga studios in various markets. Lululemon today is working
with a limited number of partners in Canada, the U.S., Australia,
New Zealand, Hong Kong, and the U.K., according to the company.
Through these strategic partnerships, Lululemon gets personal
trainers and yoga instructors from leading fitness facilities
around the world to wear and promote its products.
Source: lululemon athletica.
Similarly, Lululemon provides local yoga studios in various
markets with lulu-branded equipment, including yoga blocks and
mats. Many of these studios even sell Lululemon gear to their
members. Lululemon wouldn't say what it charges for these
supplies, but it is probably similar to the company's arrangement
with so-called brand ambassadors.
As of March, Lululemon had roughly 900 brand ambassadors in
North America alone. These are fitness leaders including
Olympians, gym owners, fitness coaches, and yoga instructors who
teach classes and train exclusively in Lululemon gear. In return,
they get 15% off all Lulu merchandise.
These strategic sales channels do much more than boost sales for
Lululemon. They create throngs of loyal customers and turn sports
aficionados into Lulu fans. Sure, Lululemon doesn't come close to
Nike's dominance in the professional sports arena, but it may not
need to. The company is finding new life in so-called "
" these days, and has innovative products rushing to market at an
impressive pace. This, together with Lulu's three under-the-radar
sales channels, should drive growth for the company in the
quarters ahead. Shares of Lululemon are down more than 40% so far
this year, but the company finally looks positioned for a
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3 Surprising Ways lululemon athletica is Driving
Sales Growth Today
originally appeared on Fool.com.
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