The Gap Goes After Lululemon
Attempting to tap into the gusher Lululemon has found, Athleta,
the women’s activewear brand owned by The Gap, last week opened its first flagship
store in San Francisco.
Founded in 1998, Athleta sells apparel to active women
across a range of activities, including yoga, running, cycling, hiking and
skiing. Targeting 30 to 50 year olds, it’s one of the largest catalog and online
stores in the space and was acquired by The Gap for $150 million in 2008
"It’s been strong double-digit growth ever since we bought the brand and
it was strong double-digit growth before we bought them," Toby Lenk, president
of Gap Direct, the unit that oversees Athleta, told Reuters.
The 5,000 square-foot store on Fillmore Street in the city’s tony Pacific
Heights neighborhood comes after the successful test of a smaller "laboratory" store
in Marin. Gap found that for every dollar that customers spent online in the
Marin region, they spent an additional $4 in the store.
"The majority of customers in this space won’t buy a product if
they can’t try it on in the store," Mr. Lenk told Bloomberg. "That’s
very clear to us — we’re the only major small specialty brand competing
without a store."
The closest competitor will be Lululemon, which last
week once again raised its quarterly estimates. With sales per square foot
averaging over $1,500 and comps climbing in the mid-to-upper-twenties in the
latest quarter, the quirky retailer is known for its yoga-trained staff, local
brand ambassadors, inspirational mantras and in-store yoga sessions. Beyond
yoga, Lululemon is also tapping strong general trends supporting running and
Another women’s-only concept is Lucy Activewear, which is owned by
VF Corp. and has 65 stores. Sporting goods and footwear chains are also testing
newer concepts to reach active consumers looking for premium brands and better
service. These include S.A. Elite from The Sports Authority, Mind Body Sole
from Famous Footwear and Foot Locker Run by Foot Locker.
The Gap is also targeting
active women at its flagship stores with its GapBodyFit collection and at Old
Navy with its GOGA-GO (Go out Get Active) line. But Athleta most directly targets
When Gap "looks at how big and explosive Lululemon has
done, and here they have this brand they’ve been incubating online, I
think right now is a good time to start opening the stores and potentially
doing something bigger," Brian
Sozzi, an analyst at Wall Street Strategies, told Bloomberg.
- Athleta Opens First Flagship
Store In San Francisco’s Fillmore Neighborhood – Gap
- Gap gets active in young market with Athleta store – Reuters
- Gap Opens California Athleta Shop to Tap Demand for `Kickbooty’ Yoga Pants
Discussion Questions: How successful do you think Gap will be transitioning the Athleta brand from the web and catalogs to a brick and mortar environment? How easy will it be for Gap and other larger retailers to tap the active women opportunity exemplified by Lululemon?