A Market Leader Confronts Its Own Stagnation
For years, Lululemon defined the athleisure boom with $100 leggings and a cult-like following. But today, the Canadian brand admits to a sobering reality: it has grown predictable, missed key style shifts, and lost momentum in its most important market — North America.
CEO Calvin McDonald’s acknowledgment that the brand’s “casual offerings have become too predictable” came during the same earnings call that revealed another quarter of comparable sales declines. Analysts and consumers alike are now questioning whether the downturn is the fault of the premium activewear category or of Lululemon itself.
The Bigger Picture: Athleisure Isn’t Dead
Industry data complicates the narrative. Circana reports U.S. activewear sales are up 3% year-over-year, with units sold growing 7% — outperforming the broader apparel market, which is down 4%. Globally, Euromonitor projects sportswear to grow nearly 5% in 2025, continuing a steady post-2020 rise.
This suggests that premium activewear demand persists — but shoppers expect novelty and fashion relevance. Competitors like Alo Yoga and Vuori have capitalized on these expectations, eating into Lululemon’s dominance with fresher assortments.
Retail strategist Liza Amlani called it a “classic big brand trap”: over-reliance on core franchises at the expense of trend agility.
What Went Wrong: Product, Pricing, and Predictability
Several issues converge around Lululemon’s slowdown:
·Design stagnation: Seasonal colors underperform, while casual collections feel dated. Analysts say assortment feels more like “replenishment” than fashion.
·Price sensitivity: With leggings often topping $100, inflation has forced consumers to justify every purchase. Without compelling newness, price resistance grows.
·Category misalignment: Rising trends like wide-leg pants, pickleball gear, and skirts have been slow to enter Lululemon’s lineup.
·Competition from dupes: Costco and private labels are encroaching with lookalikes, prompting Lululemon to file lawsuits — a defensive move that signals vulnerability.
The result: Lululemon’s once-innovative halo has dulled, even as performance-driven products still perform better than lifestyle and lounge categories.
The Turnaround Plan: Betting on “Newness”
McDonald and his team are now pushing a reset. Key steps include:
Growing new product styles to 35% of the assortment by spring 2025 (up from 23%).
Empowering Global Creative Director Jonathan Cheung to rebuild design DNA.
Hiring a Chief AI and Technology Officer to strengthen demand forecasting and product development.
This approach seeks to recapture the innovation edge, with an emphasis on design refresh and smarter technology integration. But analysts warn that “newness” alone may not cure systemic issues if assortments become fragmented or stray too far from Lululemon’s performance roots.
Analyst Skepticism: Innovation or Identity Crisis?
Some on Wall Street believe Lululemon’s core is “cracking.” Jefferies criticized heavy markdowns, logo-heavy experiments, and off-trend assortments that risk alienating core customers. HSBC went further, downgrading the stock and describing the brand as in a “downward spiral,” vulnerable not just in the U.S. but eventually in international markets too.
Others see opportunities. Younger demographics, including Gen Alpha, already embrace the brand. Lululemon’s ambassador program and community-led marketing still position it as aspirational. And its material quality remains a differentiator, even if competitors outpace it on design.
Editor’s Take: Three Lessons from Lululemon’s Struggles
·Innovation must balance core identity and fashion agility. Lean too heavily on basics, and the brand becomes boring. Chase trends too recklessly, and loyalists tune out.
·Price premiums demand justification. In inflationary times, $100 leggings need not just performance but freshness, exclusivity, and cultural relevance.
·Competitors are closing the gap. Alo, Vuori, and even Costco private labels prove that innovation and pricing agility can erode even a market leader’s moat.
The critical question: is this a temporary misstep or the start of a prolonged decline? Lululemon’s response — to innovate harder, faster, and with AI at its side — will be tested in 2025 as new styles hit stores.
For now, the brand remains in a holding pose. The challenge is whether Lululemon’s next move feels like a true reinvention — or just another stretch of the same routine.
This article references data and reporting from[RetailDive].