What Lululemon Understands about Athleisure that Adidas, Nike, and Under Armour Don't


By Emily Hickey

Athleisure is described as a fashion trend, "which clothing designed for workouts and other athletic activities is worn in other settings, such as at the workplace and at college."


There has been speculation that this long lasting, casual (and very comfortable) trend could be disintegrating? Both the stock market and fashion industry are giving signals that customers are beginning to put away their $200 workout sneakers to take out their designer shoes again. 

 

The three leading athleisure brands: Under Armour, Adidas, and Nike have been struggling with sales for the past year or so. Athleisure became a major trend early 2010 and became a leading clothing category in fashion by 2016. 

 

Workout wear wasn’t just for the gym anymore but pair your favorite workout leggings and with a trench coat and a scarf and it was an all day look. There has been speculation that the trend will eventually be replaced. 

 


Where did Adidas go wrong? Well, similarly to their competitors, Adidas is struggling to keep the North American market interested in their products. Just last year Adidas’ shares fell a tremendous forty percent. With the company’s headquarters being in Germany, it has been challenging for Adidas to keep up with American competitors, Nike and Under Armour. 

 

This problem also results in a slow turnaround from the design studio to retail shelves. This is a major obstacle because by the time apparel hits the shelves, consumers already purchased from companies that had the style sooner and they are moved onto a new trend. It’s time for Adidas to “go all in or nothing.”

 

Under Armour, shares fell 2.7 percent in the premarket session and in the past year the shares have fallen about thirty percent. As a result, Under Armour’s stocks have been downgraded in fear of not succeeding in the near future. Like many other sport apparel companies, Under Armour’s brick and mortar stores are also losing the company money because of online shopping. 

 

Under Armour’s footwear sales have fallen twenty percent and their apparel has fallen seventeen percent in the fourth quarter market. Under Armour’s approach to attempt to heal the wounds? They are continuing to invest in the company. The CEO of Under Armour Adam Lashinsky does not believe that the company should retreat from business investments but rather stick to investments that can attract more customers such as a ten year partnership the company just signed with Major League Baseball and technological advancements in their apparel. 

 

The Under Armour company as a whole has plunged thirty percent this year. Nike is also facing challenges with the decline of the Athleisure trend and brick and mortar stores. The company’s world-wide future wholesale orders which were on track to ship in six months fell about four percent. Nike is projecting single digit growth for this upcoming quarter, nothing too drastic. 

 

In 2016, Nike’s stock dropped nineteen percent making it one of the worst one-year performances to date. More recently, Nike shares have dropped 6.5 percent, which was their most drastic slide since 2015. With North American sales slowing, with 45 percent of their sales relying on North American consumers, Nike is struggling to make a comeback. Even athletic stores that sell Nike products, such as Dicks Sporting Goods and Finish Line, are also struggling to maintain a high economic standing plunging about ten percent this year. 

 

Although the future for Athleisure is up in the air, Lululemon has recently come in with numbers beating the odds, with overall sales increasing at thirteen percent last year in 2016. Lululemon’s most recent quarterly report stated that their online sales have skyrocketed thirty percent, and risen eight percent in after-market trading. 

 

Lululemon’s increasing momentum is no match for competitors Adidas, Under Armour and Nike, with even their Brick and Mortar stores have continued rising sales. The company is planning to open up to fifty physical locations and opening fifteen international locations (talk about thriving)! Lululemon also truly understands and does not underestimate the power of Omni channels retail strategies and use these techniques to their full advantage.

 

Millenials want their products whenever and wherever they want in the way that’s fastest and easiest for them. Being able to shop through their app, over the phone, in stores, and in their catalog is a key variable in their growing success and popularity. The only concern appearing thus far for Lululemon’s rapidly growing success and popularity, is will consumers be as quick to abandon Lululemon athleisure as quick as they did their competitors? Looks like Lululemon may be forcing consumers to think twice before they decide to pick… athletic or leisure?

 

Photo Source: Adidas Stan Smith and Pharrell Williams Ad Campaign


Emily Hickey 1 Comment