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[6 comments]

Lululemon Testing Tween Concept

September 3, 2009

By George Anderson

Lululemon, the upscale yoga and athletic apparel retailer, is getting set to debut a new concept developed for girls between the ages of six and 12.

Ivivva Athletica, the new concept, will launch in November at three locations in Canada and will include apparel "designed for function sports such as gymnastics, dance, figure skating, field hockey, track and field and soccer, as well as all-day versatility."

Deanne Schweitzer, head of global strategy for Lululemon, said the chain developed the new concept based on requests from customers for a line of products for younger consumers.

"The garments won't look like a mini version of Lululemon," Ms. Schweitzer told the Financial Post. "This brand is going to have unique technical features and [it is] a bit more colorful, more adventurous. These kids don't want to look like their moms."

Christine Day, CEO of Lululemon, said in a statement, “We believe this market is underserved and we are excited to create something to inspire a younger generation to be physically active.”

While many tween and teen concepts have fallen flat in recent years, Anthony Stokan of the retail consultancy Anthony Russell and Associates, believes that Lululemon has a legitimate shot to make it work.

"Parents live vicariously through their children," Mr. Stokan told the Financial Post. "Incorporating that younger age group--I can absolutely see that working for Lululemon. They have done a spectacular job at selling the mythology of 'yoga-inspired' [clothes] to the yummy mommies, but 80 percent of the people buying it love what they are buying as a fashion statement."

Discussion Questions: Is there a market for a concept like Ivivva Athletica? Will its Lululemon parentage be a positive or negative with the young consumers Ivivva Athletica hopes to attract?

FINANCIALS:     [NASDAQ:LULU]

Discussion Questions



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Comments:

A good idea, certainly worth a test. Whether the apparel sold by Ivivva is meant to be used as performance wear or (more likely) as a "status" activewear brand, it's an interesting concept. Lululemon might be flying into some economic headwinds right now, especially in terms of disposable income devoted to kids' upscale brands, but a small-scale test allows for some trial-and-error. If the brand succeeds in today's environment, it is even more likely to work in the future.

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Richard Seesel, Principal, Retailing In Focus LLC

If this was just another tween/teen concept, I would be worried; very worried. As it is, based on my conversations with dancewear and gymnastics apparel providers, this truly is an underserved market (if you define underserved as one dominated by independent players, which these days seems to be the criterion)! Lululemon's great reputation and natural starter base for the concept (offspring of its loyal mom customers) bodes well.

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Carol Spieckerman, President, newmarketbuilders

Lululemon is absolutely on to something here. It would be my hope that one of the pillars they build this brand upon is confidence building. Girls who play organized sports are more likely to be self-confident and socially integrated. There is a huge amount of activity and money spent on kids' sports and if they can provide apparel and accessories (team uniforms?) that are designed and built for those girls (not versions of their boy counter parts) they'll tap into a rich vein.

I see a couple of disconnects, though. The age range, while valid given their core business, misses the girls who really need athletic apparel that is truly feminine. And that brand name--yikes. Too much of a mouthful and doesn't speak to youth, emergent talent and energy that participating in athletics brings out in us.

Chuck Palmer, Principal Strategist, Consumer Experience Design, llc

Before we say yes, this is a great idea, I think we have to ask ourselves if we think Lululemon is definitely a success. Their clothing is very high-priced, they compete with other active-wear companies, and as well, Target has done a great job of knocking them off with a quality line of clothing, at very affordable pricing. This is not necessarily a slam-dunk for either the adult stores, nor certainly the 'tween stores.

Therefore, I think we need to take a wait and see attitude with the new concept. Certainly worth trying, but there long road to take before it is a guaranteed success.

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Joel Warady, Chief Marketing Officer, Enjoy Life Foods

While in Manhattan last week, it was quite obvious that Lulu was alive and well. We saw their clothing everywhere. Their success in both the Canadian and US markets is pretty clear, so I don't think we need to wait to see if Lululemon understands their market. They not only understand their market...they create the market and form very deep connections with their customers, right from their website to their stores.

If I have any concerns about the new concept it's that Lulu could fall into what I'll call the Beyonce syndrome (read overexposure). My fear would be that the extension to tweens could take a little of the exclusivity and magic out of the brand for their loyals.

I think they're a strong, creative brand and one that more retailers should emulate. I wish them luck.

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Doug Stephens, President, Retail Prophet

If Lululemon has conducted an ample amount of diligence and behavior research then I am ready to give them a vote of confidence for their new tween concept. That said, more companies have tried and failed with the tween group more than any other age demographic. Trying to predict their behavior is always dangerous turf.

Unlike many other age groups, both younger and older, Tweens actually do not know what they want, nor what they will buy, until almost after the fact! Good luck to Lululemon.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates

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