Athleta Hot on Lululemon’s Tail

Athleta, the online seller of women’s yoga and athletic wear that Gap Inc. bought and then brought into the brick & mortar world, is going after Lululemon.

According to a Bloomberg News report, Athleta has a game plan of opening stores in close proximity to Lululemon locations, copying some of its traffic drivers such as offering space for classes, giving clothing to local yoga instructors to promote its line and then undercutting its competitor on price.

"Gap looks at what Lulu has established and says, ‘Well, why not play off the traffic they attract and if we offer our product at a slightly lower price, we’ll get share,’" Paul Lejuez, an analyst at Nomura Securities International, told Bloomberg.

According to a Wall Street Journal article, a growing number of women are carving out substantial time on a daily basis to stay fit. These women and those who aspire to be like them are potential customers for the likes of Athleta and Lululemon.

We call our customer ‘happy crazy,’" Tess Roering, vice president of marketing for Athleta, told the Journal. "Her schedule is crazy but she’s not looking to escape it."

As reported by Bloomberg, the $14.3 billion activewear market is growing at twice the rate of women’s apparel overall, according to NPD Group. As women pursue more fitness and sport activities, they appear willing, according to Ms. Roering, to "trade up" to fabrics that wisk sweat away and reduce odors.

Athleta currently has 22 locations open in 12 states and the District of Columbia with seven others planned for summer or fall debuts.

BrainTrust

Discussion Questions

Discussion Questions: Does Athleta have the plan in place to knock Lululemon off its stride? What do you see as the most effective tactics being deployed by Athleta, Lululemon and others to attract and keep the "happy crazy" consumer?

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Matt Schmitt
Matt Schmitt
11 years ago

The growth seen by Lululemon and Athleta is obviously serving a big demand. As mentioned in the Journal article, the “fit mom” is an especially lucrative customer segment. The “to and fro dresses” are a great example of an offering with a lot of room to gain mind and market share.

Growth and market share will undoubtedly be a challenge for both of these brands as they continue opening new stores. The biggest challenge I see is that they could both suffer at the hands of a brand like Target, where the busy mom will be able to take advantage of active lifestyle fashion without seeking out a dedicated destination like Lululemon.

M. Jericho Banks PhD
M. Jericho Banks PhD
11 years ago

I’m reminded of the current Facebook flap wherein their in-house yoga instructor was canned because she “glared” at a student who was texting mid-pose during a class. Several yoga masters are now defending their sister, saying that they’d never allow phones in their classes except for medical personnel on call.

So, yoga must be a big deal. Women carry yoga mats in public instead of puppies in purses. Public posing has taken a turn, and yoga apparel seems to be central to it. Does the market have room for more than one storefront brand? It would seem so. Why should Athleta and Lululemon (never heard of either of them) try to kill each other? Can’t we all just get along?