June 29 - At a time when most retailers are struggling, Lululemon with its pricey yoga apparel and unique culture, has found a niche that has consumers buying in- and Wall Street bidding up its stock. Bobbi Rebell reports.
From the calendar of free yoga classes To a community bulletin board of fitness events To signs meant to inspire. Lululemon stores are tapping into the rise of yoga in North America, getting consumers to open their wallets, and pay full price, at a time when most retailers are slashing prices. Chief Financial Officer John Currie: SOUNDBITE: JOHN CURRIE, CHIEF FINANCIAL OFFICER, LULULEMON ATHLETICA (ENGLISH) SAYING: "Our products are built to last five years. So in a tough economy, in a recession, a woman will cut back on her spending but she'll still pay for quality. Especially when it's an affordable luxury that has a fashion element as well." That quality and trendy styles come at a price- Yoga tops can run over $50, pants over $100. The company says it's on track to hit a billion dollars in revenue next year- and its stock is trading at all time highs. That success has brought competition. SOUNDBITE: JOHN CURRIE, CHIEF FINANCIAL OFFICER, LULULEMON ATHLETICA (ENGLISH) SAYING: "Most competitors are coming after us with a lower price point and by necessity they need to come with a lower quality and therefore we are sticking to our game which is to continue to innovate and improve the quality and even at a slightly higher price point that is still attracting the guest." In addition to opening more U.S. stores, Lululemon is looking to expand online, where it generates about 10 percent of its revenue. The key- keeping that Lululemon culture. Bill Tancer of Experian Marketing Services: SOUNDBITE: BILL TANCER, GENERAL MANAGER GLOBAL RESEARCH, EXPERIAN MARKETING SERVICES (ENGLISH) SAYING: "You want to feel that sense of community that you might feel when you go into a Lululemon store to do one of their free yoga classes before purchasing something. So it's about building that community that kind of mirrors what you see in the bricks and mortar stores I think that's going to be really important to the success of their e-commerce effort." While some analysts have expressed concern about an over dependence on the yoga trend, Lululemon is expanding its product line, allocating about 20 percent of its floor space to men's apparel, and offering gear for other sports, like running. Bobbi Rebell, Reuters