is aggressively moving into new product categories with the
release of its fresh
fashion line. When you think Lululemon, you may think yoga pants
and Luon tanks, but that could soon change. The yoga apparel
maker's latest strategy is to get customers to wear their gear
not only to the gym, but also in the workplace or during a night
on the town with friends. Let's see what Lululemon has up its
sleeve and whether this plan will pay off for the retailer down
Versatility at its best
From working out to going out, Lululemon hopes customers will
wear its new apparel outside of the gym. The company is
reinventing the rules of its business by expanding into apparel
that can be worn in the workplace with products like its new
Forme Jacket and Blazer Vest, pictured below.
Blazer vest. Source: Lululemon Athletica.
Lulu's new line includes sweaters, stylized crop pants, and
dresses. In its latest ad campaign for the products, Lululemon
quips, "Perfect day-to-night versatility ... we just swap our
sneakers for heels." Now
is a strategy with extra legroom. If these products are a hit
with consumers, the company could significantly improve sales
while at the same time broadening its customer base from strictly
workout folk to a much larger addressable market. These products
aren't cheap, the brand's latest sweater look will cost you
around $108. However, it is made with fabric that is less workout
and more quality such as cashmere and rayon blends made from
Source: Lululemon Athletica.
Initial demand for these items looks strong. In fact, certain
pieces from Lululemon's fall line, such as its Avenue Blouse,
pictured here, Sweet Jorts, and Get It On Pant, have already sold
out online. This is a good sign for a brand that has suffered
recently at the hands of increased competition and internal drama
between the company's board and founder Chip Wilson.
Nevertheless, selling out online could suggest that Lululemon
still struggles with inventory problems. Not having enough
products in stock has burned the retailer in the past. If you
remember, Lululemon's Luon pants
last year forced the retailer to reevaluate its supply chain,
which led to product delays and weak inventory around the
all-important holiday shopping season.
Source: Lululemon Athletica.
A lesson in supply and demand
You can't sell products you don't have. If Lululemon's new fall
line is a hit with consumers, the company must be sure it has an
abundance of the new merchandise, both in stores and
online. Only then might we see a turnaround in Lululemon's
stock, which has fallen more than 42% over the past year . The
stock is now trading at roughly $39 a pop, nearly 50% below its
52-week high. Fortunately, in addition to its new product line,
the company has other strong catalysts going forward. Enter
Laurent Potdevin, Lulu's new chief executive.
Potdevin brings a fresh perspective to Lululemon. Not to
mention, having previously worked at Toms shoes, he is a perfect
match with the company's grass-roots corporate culture. I'm
already encouraged by the innovation we've seen from Lululemon
since Potdevin took over for Christine Day in January.
A new direction
Another promising development is Wilson's recent decision to sell
half his stake in the company to private-equity firm Advent
International for $845 million. Ultimately, this is a good thing
for shareholders because it will enable Lululemon to focus on
product development and supply chain efficiencies rather than
worrying about internal conflicts between Wilson and the board of
directors. This, together with new leadership and a promising
fall lineup of products, could fuel a comeback in Lululemon in
the quarters ahead.
You'll Never Guess Where Lululemon Athletica
Wants You to Wear Its Newest Product Line
originally appeared on Fool.com.
owns shares of Lululemon Athletica. The Motley Fool recommends
Lululemon Athletica. Try any of our Foolish newsletter services
free for 30 days
. We Fools may not all hold the same opinions, but we all believe
considering a diverse range of insights
makes us better investors. The Motley Fool has a
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights
reserved. The Motley Fool has a