- Lululemon, the Canada-based athletic retailer, continues to impress investors with strong sales. The company reported a 14% increase in same-store sales in the first quarter of 2019.
- Meanwhile, Athleta has been a bright spot for its struggling parent company,Gap Inc. “Athleta continues to be one of North America’s fastest growing athletic brands that is positioned to capture share,” Gap Inc. CEO Arthur Peck said in a call with investors in May.
- While both brands are posting gains, Lululemon is growing at a rapid pace as it innovates in areas Athleta lacks, including menswear and in-store technology.
- We visited Lululemon and Athleta stores and saw why Lululemon is dominating the athleisure sector.
Though both Lululemon and Athleta continue to report growing sales in an increasingly saturated athletic wear market, Lululemon’s focus on innovation in both product assortment and in-store technology is paying off.
In a call with investors on Wednesday, Lululemon CEO Calvin McDonald reported significant growth across the company’s “Power of Three” growth plan – a five-year strategy focused on bolstering its menswear, e-commerce, and international businesses. Progress in these categories showed: Menswear revenue in the first quarter of 2019 rose 33%, online revenue increased by 35%, and international revenue leapt by 39%.
“Our innovative merchandise assortments and our engagement with guests around the world enables the financial results we’re proud to report to you today,” McDonald said on the call.
While it remains to be seen how Gap Inc.‘s ongoing challenges may impact Athleta – including Gap’s recently announced plans to spin off Old Navy into a separate company – the brand is still on an upward trajectory and plans to open a total of 25 new stores in 2019. Athleta, which Gap acquired in 2006, also just celebrated its first year as a certified B Corporation, a testament to its work on sustainability.
Still, a visit to both stores showed why Lululemon’s rapid growth is outpacing Athleta:
We visited a Lululemon store in New York City’s Soho neighbourhood first.
The sprawling store has three floors: two dedicated to womenswear, one for men’s clothing, and an exercise studio that hosts a variety of classes.
We started with a visit to the men’s section, on the basement level. Lululemon CEO Calvin McDonald said menswear growth in the first quarter of 2019 was driven primarily by its ABC (anti-ball crushing) pant, as well as its core short styles.
Improved product design remains essential to the growth of the menswear category, McDonald said.
“Guests are responding well to our new boxers designed to address all three elements of the science of feel: touch, temperature and movement,” he said on Thursday’s investor call.
There were several interactive screens throughout the store, where shoppers could browse styles and reserve products that may not be available in-store.
Next, we went upstairs to check out the first of two women’s floors.
The first floor was a reflection of Lululemon’s efforts to move beyond athleisure and yoga pants. It featured a wide array of more casual clothing items, swimwear, and accessories.
Near the cash wrap, we found a tidy display of bags and specialty socks.
Onward to the second floor. The store features local flare in the form of original artwork by Manhattan-based mural artist Tony Sjöman.
Here we found the iconic yoga pants that propelled Lululemon to fame.
We also found a small sale section.
After browsing the sale, we climbed the stairs to the third floor to explore the Lululemon studio.
The studio was spacious and clean. Shoppers can sign up for classes online and choose from a range of activities including yoga, strength training, and high-intensity interval training.
It also has ample lockers for stowing away personal belongings during a yoga session.
Next, we visited an Athleta store on Fifth Avenue in Manhattan. The store shares a block with fellow Gap Inc. brands Gap, GapKids, and BabyGap.
It was the only one of the group that didn’t have sales signs by the door and in the window displays. Instead, it had a sign promoting its onsite studio classes.
Right when you walk in, there’s a display dedicated to cycling apparel, as well as a sign celebrating Athleta’s B Corp status.
“Part of the Athleta magic, it’s clear brand identity and its commitment to sustainability,” Gap Inc. CEO Arthur Peck said during a call to investors in May. “Athleta just celebrated its first year as a B Corp by announcing progress against its sustainability goals, including 60% of materials now being made from sustainable fibres.”
There were actually several displays touting Athleta’s sustainability efforts throughout the store.
The mannequins showed how Athleta’s products could be used for a variety of physical activities, from running to yoga.
Unlike Lululemon, Athleta only sells women’s clothing.
However, much like Lululemon, the store was home to several plants.
Though both Lululemon and Athleta have a girls’ collection, only Athleta featured a section dedicated to it in the store.
In comparison to Lululemon, Athleta has leaned a bit more overtly into casual wear. Here is a part of the store dedicated to comfy commuting clothes.
Athleta also has partnerships with brands like Birkenstock, which were featured throughout the store.
Like Lululemon (but unlike Athleta’s fellow Gap brands), there was a very small sale section.
The Athleta store didn’t have three floors, but it did have a studio space in the basement.
While a bit less luxurious than the Lululemon studio, Athleta’s space still offered all the essentials, as well as an empowering atmosphere.
Though Athleta had some stylish legging styles, ultimately it was clear Lululemon came up on top.
With a robust men’s collection and advancements on in-store technology, Lululemon proved it had an edge over Athleta.
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