Lululemon Athletica, the renowned athletic apparel retailer primarily associated with yoga pants and “belt bags,” has embarked on an exciting journey by entering the men’s footwear market. This strategic move comes as the company seeks to diversify its product offerings and achieve significant growth in the face of intensifying competition within the athletic apparel industry.
The New Lineup: Casual Sneakers and Running Shoes
Lululemon’s foray into the men’s footwear market marks a significant milestone in its expansion plans. The retailer is set to unveil its inaugural casual sneaker, named “cityverse,” alongside two innovative running shoe models. What sets this launch apart is that all these models will be available in both men’s and women’s styles, demonstrating Lululemon’s commitment to inclusivity and versatility. The much-anticipated cityverse will make its debut on February 13, followed by the release of the new running models in March and May.
Credits: Lululemon
Lululemon’s Growth Strategy
This bold venture into men’s footwear is an integral part of Lululemon’s broader strategy, announced in April 2022, aimed at doubling its men’s business and achieving a revenue target of $12.5 billion by 2026. Nikki Neuburger, Lululemon’s Chief Brand Officer, emphasized the significance of this expansion, describing it as a key growth pillar. While recognizing the relatively modest size of the footwear category within their product lineup, Lululemon remains enthusiastic about the possibilities it offers in providing customers with more choices.
Neuburger also clarified that although the footwear launch is an exciting addition to its offerings, it is not the linchpin of its growth strategy, stating that the core of its business will continue to revolve around apparel.
As Lululemon diversifies, it faces stiff competition from established industry giants like Nike and Adidas, as well as newer players such as On Running. These competitors have already integrated men’s footwear as a central component of their product portfolios. The ever-evolving nature of the athletic apparel market has placed a premium on innovation and brand recognition, a challenge that Lululemon is poised to meet head-on.
Lululemon’s Journey into Men’s Fashion
Despite being a prominent player in the women’s athleticwear segment, Lululemon has encountered difficulties in gaining comparable traction among male customers. According to the company’s latest earnings call, brand awareness among men in the U.S. remains at approximately 13%, 12% in Australia and single digits everywhere else outside of North America. Furthermore, the growth of men’s wear sales has lagged behind its women’s division over the past three quarters. The introduction of footwear is Lululemon’s strategic response to invigorate its men’s business.
Nikki Neuburger underlined the importance of footwear in men’s fashion, noting that male consumers often begin their outfit considerations from the feet up. While acknowledging the challenge of persuading men to switch from established brands like Nike and Adidas, analysts believe that Lululemon’s strengths in athleisure wear, such as the ABC pant, could synergize effectively with its casual sneaker offerings.
Industry Insights and Expectations
Industry experts like Tom Nikic from Wedbush believe that Lululemon’s footwear venture will undoubtedly contribute to expanding its men’s business and enhancing customer loyalty. However, penetrating the competitive men’s footwear market will not be a straightforward task. Nikic predicts that Lululemon may find success in the casual sneaker space, particularly by leveraging its successful athleisure products. Nevertheless, the significant impact on Lululemon’s growth trajectory will likely take several years to materialize.
Tom Nikic’s insights shed light on the complexities Lululemon faces in the male footwear category. While acknowledging the potential for growth, Nikic also highlights the formidable challenge of convincing men to transition from established brands like Nike and Adidas. He aptly characterizes it as a “tough nut to crack” due to the entrenched loyalty customers often have for their footwear choices.
Nikic’s commentary underscores that while Lululemon’s initial foray into men’s footwear may face hurdles, it is not an insurmountable task. He sees an opportunity for Lululemon to excel in the casual sneaker space, potentially capitalizing on the popularity of its successful athleisure offerings among men, such as the popular ABC pant.
While Lululemon has experienced notable growth in the footwear category, accounting for roughly 12% of the company’s total revenue, it is not banking on footwear sales to achieve its long-term revenue target. However, Nikic emphasizes that it will take time for the impact of Lululemon’s footwear venture to become significant, echoing the sentiment that the core apparel business remains the primary driver of growth. In essence, while Lululemon’s foray into footwear is a promising addition to its product lineup, its true potential may take time to fully unfold.
The Future of Lululemon in Footwear
Looking ahead, Lululemon’s expansion into men’s footwear is poised to contribute positively to its growth, but the journey is just beginning. The company will continue to focus on its core apparel business while gradually establishing its presence in the footwear market. Experts emphasize that Lululemon’s innovative approach to design and proprietary technologies will set it apart from competitors and potentially attract a loyal customer base.
Lululemon’s entry into the men’s footwear market represents a significant strategic move in the company’s quest for sustained growth and diversification. While the footwear venture is not the linchpin of its growth strategy, it offers exciting opportunities to engage a broader customer base and compete effectively with established industry players. Lululemon’s dedication to innovation and its commitment to excellence in design may well prove to be the key differentiators that set the brand apart in the fiercely competitive athletic apparel landscape.
Featured image courtesy of ajay_suresh/CC BY 2.0 via Flickr