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Can Lululemon Double its Men’s Wear Revenue Over the Next Five Years?

In April, after Lululemon reported its strongest quarter of growth in six years, propelling share prices to 268 percent of their previous value, the brand released what it called the “three pillars of growth” for Lululemon Athletica.

Inside, Lululemon presented a bold five-year plan: it would double its digital sales, quadruple its international sales and—in perhaps its boldest promise—it would double its men’s wear sales too.

The brand has an established reputation for being the go-to brand for upscale, active women with a love of yoga. Over time, it has gradually broadened that image and, in the last few years, learned to appeal more to men. Even still, questions remain about Lululemon’s ability to pull in mainstream men’s wear business.

In truth, men’s wear is already one of the Lululemon’s fastest-growing categories with around 20 percent penetration and, according to the brand’s most recent financial report, it’s already outpacing women’s wear in terms of growth.

“We’re really excited with the trend in our men’s business,” Stuart Haselden, Lululemon’s COO said. “Our men’s pants have been one of the fastest growing categories within men’s, it’s become an important way in which we acquire new guys to the brand. And at this point, it’s larger actually than our metal or our performance tops business, which, prior to the last year, had been the largest category. Outerwear has been another success story for us in 2018, with a huge increase in our admittedly small outerwear business in men’s, which just is an indication to us rather how big this business could be.”

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In its report, Lululemon named the 28 percent growth in men’s bottoms as one of its primary “growth pillars,” joining 70 percent sales growth in Asia and a 30 percent increase in site traffic on the brand’s FY18 highlight reel.

However, Cecile Lee, analyst and head of account management at Trendalytics, thinks the activewear brand has more ground to make up when it comes to appealing to men.

“Think about Nike and Adidas, the traditional places where men will be buying their athletic wear, they have a lot of athlete influencers,” Lee explained. “That’s really what they’re doing really well. It’s not just that they have well-made clothes and technical garments, etc., they also have a lot of the sports icons and the heroes. The influencers who, from a clothing perspective, are there for your run-of-the-mill man to have as a part of their cadre. I think those types of influencers, those brands are going to be what Lulu has to get over.”

One of its primary issues with men, Lee said, is simply that the name “Lululemon” doesn’t exactly scream masculinity. The average man may conflate the brand’s image with suburban yoga, she explained, as Lululemon’s presence in that space has been nothing short of defining.

Among the first steps Lululemon is taking to combat its brand issues is by increasing both the size and importance of its men’s wear sections in-store by expanding product selection and enlarging the actual spaces where its male customers shop. At its Mall of America location, Lululemon expanded the store’s sales area from 3,000 to 5,000 square feet. According to the brand, that expansion resulted in 80 percent sales growth in men’s wear products at that particular location.

Although Lululemon said it’s unsure whether that strategy would translate directly in other locations, Lee said she sees it as a way for the brand to offer more than just products but, rather, a multi-use space for the local Lululemon community.

“Now people are trying to think of more creative things to do with their stores,” Lee said. “If you expand your store’s square footage, now you have the space to run spin classes or yoga classes, for example. People are not afraid of engaging in that kind of thing if the instructors are good. That’s what people are moving toward, repurposing. It’s not racks of stuff anymore, it’s a space to do stuff.”

Another way Lululemon plans to use physical retail to pull in new male shoppers is by building co-located stores in areas where expansion is impossible. That means more consumers will start to see Lululemon men’s wear on its own, away from its traditional context—all part of Lululemon’s plan to create more spaces with a “more effective presentation of our men’s products,” the company said.

For all of that, it appears the work Lululemon is putting into expanding its consumer demographics is beginning to pay off. According to a YouGov poll that measured purchase consideration for the brand among men and women since 2016, the brand’s mindshare among men has experienced a healthy expansion in recent years. The percentage of men that reported a desire to buy a Lululemon product in the near future has more than doubled since 2016—with about 5 percent saying they intended to make a purchase from the brand that year, compared to the 13 percent reporting the same in April 2019.

Lululemon Men's Wear Chart YouGov
YouGov’s survey shows a clear rise in men’s purchasing interest (and a steady appeal among women) for Lululemon since 2016. YouGov

YouGov, a market research company, said it began to notice a change in sentiment among men after Lululemon launched its first marketing campaign directed at the demographic in 2017. The ad campaign focused on creating an air of inclusion for the brand, drawing in men that were interested but unsure if they could participate in the athleisure phenomenon of which Lululemon was the unofficial center.

According to YouGov pollsters, the campaign appeared to have worked.

“In mid-September, Lululemon, largely known for selling yoga pants, launched its first ad campaign aimed at men.” YouGov data journalist Paul Hiebert wrote in November 2017. “Titled “Strength to Be,” the campaign features men who occupy traditionally masculine roles, such as a surfer, boxer, and rapper. About two months later, by mid-November, men were giving Lululemon a seven-point higher Quality score than women (17 to 10), marking a notable difference in how the two consumer groups have viewed the brand in the past.”

The ad campaign hit directly at the heart of what Lululemon needed to do to participate in men’s spaces, Lee said. However, it may be that those spaces still aren’t “masculine” in traditional ways. She believes it’s possible the brand is, more or less, undistressed by its inability to pull in consumers that place a high value on masculinity—despite the fact that it may need to in order to achieve its goals.

“Are there enough of those consumers for the brand to double its business?” she questioned. “They basically need to go on a wild tear for customer acquisition in places like New York and Los Angeles. How are they going to do that as well in the mainstream?”

The answer to that question is likely going to come down to product, Lee said, an area that Lululemon is poised to succeed in if current trends hold.

“We’ve been talking a lot about the concept of work leisure and they have a bunch of crossover pieces that are totally appropriate in a [casual work environment],” Lee concluded. “As those jobs become a larger portion of the workforce, there is now a huge movement…toward professional clothing made from technical fabric made to be more comfortable and breathable.”

For its part, Lululemon said it will have a “nice balance” of technical performance products and what it calls “office travel” or “commute” styles in FY19. The brand said it believes the appeal of this product mix will give it the runway it needs to grow its men’s business over the next five years. Ultimately, the brand said, the goal is to become dual-gender—opening up the entire marketplace to the Sweatlife.