Gap Is Slowly Becoming Lululemon's Biggest Threat


Photo: By lululemonathletica on Flickr

Lululemon has grown into a yoga juggernaut, but there are others that want in on the action.Its biggest threat is emerging in the form of Gap’s Athleta brand, reports Sapna Maheshwari at Bloomberg.

It’s not just the market share Gap wants — it’s the type of customers. Lululemon boasts some of the most intensely devoted customers in apparel. They’re willing to pay lofty prices and always come back for more.

So, it’s copying Lululemon in an attempt to snag customers.

Bloomberg elaborates:

“Like Lululemon, Athleta is hooking up with local yoga instructors and sponsoring classes such as mummy & Me Yoga. Like Lululemon, Athleta trains staff to make garment recommendations tailored to customers’ pursuits — a half-marathon, say, or paddle boarding. Gap’s yoga upstart is making inroads. Exhibit A: Lululemon “brand ambassadors” are buying Athleta clothes.”

There’s one big key to Gap’s strategy, though. Lululemon is very expensive, and Gap has the muscle to undercut its prices significantly.

Also, Gap is basically stalking Lululemon stores now, according to Bloomberg. Every time Lululemon opens a retail location in a mall, Gap opens an Athleta store in the same mall. Toby Lenk, who heads up Gap’s online operations, said that this was a coincidence.

Right now, Gap’s yoga business (Athleta and Piperlime) is still about a third of the size of Lululemon, but Gap CEO Glenn Murphy noted last month that “the stores are doing very well so far.”

This should get interesting.

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