No Fear Of The Epidemic In The First Quarter Revenue Of Over 4 Billion 600 Million, Expensive Nike And Adi Lulu Lemon Done Right?

Lululemon athletica, a Canadian sporting goods company temporarily closed by the epidemic. Inc (hereinafter referred to as "Lulu lemon") recently released the first quarter report card in 2020. In the three months ended May 3rd, Lulu lemon business income amounted to US $652 million (about 4 billion 657 million yuan), down 17% compared with the same period last year. Net profit attributable to parent company shareholders was 29 million US dollars (about 205 million yuan, the first textile net note), a 70.36% decrease compared with the same period last year.

During the reporting period, sales income of Lulu lemon line was about $352 million, an increase of 68% compared with the same period last year, accounting for 54% of revenue. As of June 10th, 295 stores in Lulu lemon business have resumed business, including 190 in North America, 13 in Europe, 53 in Asia and 39 in Australia. By the end of June, the terminal stores can basically resume business, and the number of Lulu lemon stores is up to the end of the first quarter of 2020. Up to 489.

Publicly available, Lulu lemon was founded in 1998 in Vancouver, Canada. It is a world-renowned Yoga sportswear manufacturer. It includes lululemon main brand Yoga apparel and young girl Yoga dress brand ivivva and related series of sports accessories and accessories. The products of the company stand out from the many sportswear brands with the characteristics of being comfortable, fashionable and stylish, and quickly become fashionable sports brands popular with women. In North America, it is the first choice for yoga, fitness and other activities. It has the reputation of "top Yoga wear".

Lulu lemon opened its first physical store in Vancouver at the end of 2000, began selling women's Yoga apparel and accessories, and listed on NASDAQ in 2007. Then, with the help of capital, the category was further extended to sports fashion. In the more than 10 years since its listing, the market value has expanded from the US $1 billion 600 million at the beginning of the listing to the US $37 billion of today (June 15, 2020), the annual compound growth rate is nearly 30%, and its operating income also increased from US $275 million in 2007 to US $3 billion 980 million in 2019, while net profit increased from US $30 million in 2007 to US $650 million in 2019.

And from the point of view of the channel, the income growth of e-commerce channel is relatively high. In 2019, the electricity revenue increased by 32.5% to 1 billion 140 million US dollars, accounting for 28.6% of the total revenue. Its growth was mainly due to the increase in the number of e-commerce websites and the increase in the conversion rate. Meanwhile, the offline stores were expanding rapidly, and revenue grew 17.6% over the same period last year.

In 2019, Lulu lemon opened 51 new outlets, including 19 in North America, 24 in the Asia Pacific region and 8 in Europe. It added three international markets in Holland, Norway and Malaysia, and opened local e-commerce services in Germany, France and Japan.

Insiders say that the growth of Lulu lemon can be described as twists and turns, which has experienced a period of rapid growth from 2007 to 2012. At that time, the yoga movement began to rise in North America, and the competitors in the Yoga wear market were very few. By virtue of its professional products and unique emotional marketing methods, and the rapid expansion of channels, it achieved rapid growth in performance. After 2013, the company suffered a series of problems such as recall of product quality problems, management turbulence and blocked brand diversification. Meanwhile, rival UA grew rapidly and Lulu lemon fell into a 4 year adjustment period. After 2017, the company upgraded its products in an all-round way, expanded its category, optimized the channels and expanded the global market. The market value was doubled and its market value doubled from the beginning of 2018.

In 2019, Lulu lemon launched the "ThePowerofThree" growth plan. The three measures were product innovation, all-round customer experience enhancement and market expansion. In terms of product innovation, the company not only enriches the types of core products, promotes product technology, but also expands the scope of products in the men's field, making the income of men's products increase by 34%.

Lulu lemon started in the Minority Female Yoga wear, with excellent research and development strength and quality product quality, smoothly expand the product to other sports scenes. Taking the east wind of sports fashion, the product is fashionable and functional. Although it is priced higher, it is more fashionable than UA and more functional than NIKE.

Lulu lemon is a special existence in the whole sports and leisure market. It enters the market with yoga pants as the entry point. At present, it extends its business to three aspects: sports and leisure wear, men's wear and girls' wear. It extends from yoga to running, dancing and comprehensive training, and it also gives consumers a positive impression in terms of quality, technology and design sense.

The function and comfort of fabrics are of great importance to sports products. Lulu lemon products overcome the hot and tight pain of traditional yoga clothing, and improve the advantages of quick drying, sweating, touch softness, coolness, elasticity and four direction stretching. In recent years, Lulu lemon has been widely co operating with high quality fabric providers to jointly develop high-quality fabrics for star products, such as ABC men's trousers with four directional stretch Warpstreme fabrics, likenothingbra with ultra light nude fabric Ultralu, and underwear and cycling pants with fast drying and sweat absorbing cool touch fabrics.

In terms of product design, from the user's point of view, to maximize the comfort level, such as lengthening the tight vest, matching the outer part of the buttocks with the yoga pants, and adding the unique design such as "dark pocket", "double side wear" and "night flash", combined with the principles of ergonomics and sports, enable the product to give some protection and support to the human body during the vigorous exercise. The above design features make Lulu lemon stand out quickly in practical, comfortable and technological sense in the monotonous cotton yoga clothing market.

Compared with Nike and Adi, which are widely loved by consumers, lululemon is better at pricing products. For example, in sports underwear, the highest price of Nike is 449 yuan, and Adi is 480 yuan, while Lulu lemon is 850 yuan, which is two times of Nike and ADI. In terms of yoga pants, Nike's highest price is 899 yuan, Adidas is 1030 yuan, and Lulu lemon is 1180 yuan. Even in girls' wear.

Southwest Securities analyst Shen Wenqi said that with the increasing popularity of sports and leisure, the participants in sports and leisure market have not only limited to Lululemon's niche brands. Many of the giants already existing in the sporting goods industry and clothing industry are making strategic adjustments quickly and relying on the original production line, consumer groups, supply chain and marketing network. Dynamic leisure market share. In addition, the rise of e-commerce and social media in recent years is also promoting the change of consumers' shopping habits.

But it is also necessary to see that the essence of sportswear and leisure is still movement, which is accompanied by the rise of consumers from offices to gymnasiums. Despite the blurring of the boundaries between fashion and sports, the functional requirements of consumers for sportswear and clothing have not been reduced, while physical education companies still have greater advantages in the supply chain and the functional R & D of sports products. This trend will still bring maximum benefits.

For Lulu lemon, performance growth has begun to slow down in recent years, while Orient Securities analyst Shi Hongmei believes that on the one hand, because of several different recalls, consumers have doubts about the new products, and during the period, the company has increased the price of some trousers, giving people the impression that "quality is declining while prices are rising", causing consumers dissatisfaction. On the one hand, in the early days of the founding of the company, the company was riding a dust in the field of women's leisure sports. In recent years, whether the mass sports brand Nike, Adidas, or the subdivision brand UnderArmour, even the casual wear brand GAP, the underwear brand Vitoria's secret are all developing in the female sports field, and the market competition is more and more intense, which also exposes the lack of the company's products. Point, plus product price increase, makes it easy for consumers to switch to other brands.

In addition, Lulu lemon internal management changes, as well as frequent rumors of high-level disagreement, but also indirectly shows the company's internal management problems. Shi Hongmei believes that the future emerging markets such as Asia and the Middle East will bring new growth opportunities to the company after the company has cleared up management ideas and reorganized the battle.

Shi Hongmei said that in terms of the history of Lulu lemons and the capital market, local domestic brands should also pay attention to several points: first, the emergence and sustainable development of vertical subdivision brands can not be separated from their differentiated market positioning or differentiated promotion models; two, product quality is one of the core factors of clothing consumer goods competition, and on this basis, we should grasp the trend of consumption. Can achieve double effect; three, marketing "consumer belief" can get higher pricing power than the marketing brand; four, positioning the middle and high-end brands of the middle class consumer groups will fully benefit from the increment brought by consumption upgrading.

Shi Hongmei stressed that along with the domestic brand clothing consumption into the era of diversification and individuation, the intergenerational handover of young consumer groups, the middle class's demand for high-quality, personalized and differentiated consumption gradually increased, and the market showed a fragmented trend. Referring to the mature market development in Europe and America, the marketing promotion in the past 20 years has been emerging through vertical segmentation and differentiated marketing. Now a small and big brand, it is expected that in the future there will continue to be brand clothing companies that can meet and even lead different segments of the group and have the opportunity to achieve sustained growth through the extension of category, brand and customer group.