Lululemon plans stores just for men
It already sells products aimed at them, but it's preparing a risky move to take that business to a new level.
The chain, which recently fixed a manufacturing defect that made its yoga pants bottoms too sheer, plans to open stand-alone stores for men by 2016, Bloomberg News quotes CEO Christine Day as saying. Men already have plenty to choose from at Lululemon stores, including $88 tops and $32 boxer shorts.
Men's goods now account for less than 10% of Lululemon's sales, but demand for them has been growing faster than for the rest of its business, the news service says.
Investors are growing concerned about Lululemon's growth prospects in the wake of CEO Day's unexpected retirement, even though the company reported better-than-expected earnings and gave bullish guidance for the current quarter. It continues to face fierce competition from rivals such as Under Armour (UA) and Nike (NKE), which may feel emboldened by the negative publicity around Lululemon's sheer pants, a quality-control problem that wasn't Lululemon's first.
The new expansion strategy is risky. As Bloomberg noted, many fashion brands that appeal mainly to women have failed to attract male buyers, sometimes spectacularly so. Who can forget New England Patriots Quarterback Tom Brady's odd endorsement of Deckers Outdoor's (DECK) Ugg boots, which USA Today said are "worn predominantly by suburban women, sorority girls and men who get them as a gift and forget to return them"?
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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