Hitha Prabhakar,
[email protected] REPORT Reverdy Johnson,
[email protected] Lululemon Remains in High Demand and in Command of Pricing Companies: BRK.A, ETR:ADS, DKS, GPS, JCP, JWN, LULU, NKE, SHLD, TGT, TJX, UA, VFC, WMT March 11, 2013 Research Question: Can Lululemon successfully defend and grow its market share in the activewear market as competition increases? Summary of Findings Silo Summaries Thirty-two of 44 sources said Lululemon Athletica Inc. (LULU) 1) FASHION MAGAZINE AND WEBSITE EDITORS remains the leading high-end activewear brand and will Two of three sources said LULU still is in high demand and will not lose out to the growing list of competitors. The third remain in demand despite greater competition. source questioned Lululemon’s ability to stave off Lululemon is expected to be able to maintain its pricing competitors because of its high prices and the improved power because it also has become a lifestyle brand. Three quality from lower-priced competitors. retail consultant sources said Lulu could successfully push 2) RETAIL CONSULTANTS through a 10% to 15% price increase, and two specialists All three sources said Lululemon is the leading high-end cautioned that Lulu could damage its brand identity and brand and could successfully push through a 10% to 15% cache if it were to lower prices. In fact, they said it was more price increase. Two sources raised concerns about LULU’s susceptible to threats from higher-priced entrants than from back-end operations, which resulted in supply chain low-end competitors. mismanagement and inventory shortages during the holidays and could hamper efforts to expand online.