Canadian sportswear band, Lululemon store in Hong Kong.
Budrul Chukrut | Light rocket | fake images
lululemon is launching its first line of men's footwear and casual sneakers as the retailer seeks new avenues for growth in the increasingly crowded sportswear space, the company announced Thursday.
The retailer is introducing its first casual sneaker, dubbed the “cityverse,” along with two new running shoes that will be available for the first time in men's and women's styles. Cityverse will launch on February 13, while new running models will debut in March and May.
Lululemon's foray into men's footwear is part of a broader strategy the company announced in April 2022 to double its men's business and grow revenue to $12.5 billion by 2026.
“Doubling the men's business is absolutely a key growth pillar for us, and while footwear is a relatively small category for us and we are in the early stages of our footwear journey, we are excited about the prospect of the role that in giving you more options,” Lululemon chief brand officer Nikki Neuburger told CNBC in an interview.
Still, the launch is just “icing on the cake and a plus” for Lululemon because the company's growth strategy “doesn't depend on footwear,” Neuburger said.
Lululemon Expanded Footwear Collection
Courtesy: Lululemon
The launch comes as Lululemon grows at a slower pace than in the past and competition from legacy players like Nike and newer entrants, like On Running, are heating up. In the three months ended October 29, Lululemon posted a 19% increase in sales, up from a 28% increase in the prior-year quarter.
Most of Wall Street still views Lululemon as a best-in-class retailer, but some companies expect its growth to moderate more as the company matures and industry-wide demand slows. Last week, HSBC downgraded Lululemon to Hold from a previous Buy rating, as it expects its strong performance compared to other retailers to slow as demand slows.
Neuburger said apparel will remain the “master” and “core” of Lululemon's overall business. However, his expansion into men's footwear will give the retailer an advantage when competing with companies like Nike. adidasHoka and On Running, which have made men's footwear a core element of their core offering.
In December, Lululemon CEO Calvin McDonald told analysts on the company's third-quarter earnings call that awareness of its brand among men remains low, around 13% in the U.S. ., 12% in Australia and single digits in the rest of the world outside North America. He said the numbers show he has room to grow in the category.
To differentiate itself from the competition, Lululemon aims to differentiate itself with innovation and a strong brand, Neuberger said.
“The innovative approach we take to design and our patented technologies… that's not something other brands offer on every model in their range,” Neuberger said.
