Lululemon is expanding its physical and digital footprint with new overseas ventures.
On Tuesday, the Vancouver-based activewear giant announced plans to open two new stores in Spain in September. The move is part of the company’s “Power of Three ×2” growth plan to quadruple its global 2021 revenue to $12.5 billion by the end of 2026.
With more than 550 stores in North America, Asia, Australia, the U.K. and Europe, the openings represent Lululemon’s first move into a new European market in two years. The stores will be located in Madrid’s Calle Serrano and Barcelona’s Paseo de Gracia shopping districts. The athleticwear brand will also launch a Spanish e-commerce site, lululemon.es, in late July, selling apparel and accessories for men and women.
“As a brand which supports wellbeing, Lululemon has a strong synergy with the active, balanced lifestyle enjoyed in Spain,” André Maestrini, Lululemon international executive vice president, said in a statement. “The strength of our model across product innovation, guest experience, community and culture provides a unique advantage as we introduce lululemon to our newest market.”
Lululemon operates nearly 40 stores in France, Germany, Ireland, the Netherlands, Norway, Sweden, Switzerland, and the U.K. It has been shipping to other countries lacking a brick-and-mortar presence through its E.U. website.
“We’re looking forward to connecting with Spanish guests, through our website and at our first retail stores opening in Madrid and Barcelona,” Maestrini said.
CEO Calvin McDonald earlier this year said he expects to see a compound annual growth rate of 15 percent over the next four years. The company’s men’s and digital businesses have doubled over the past two years—a full year ahead of company projections—and Lululemon expects to quadruple its international business from 2018 numbers by the end of this year, he added.
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In the quarter ending May 1, year-over-year net revenue grew by 32 percent to $1.6 billion, prompting the company to raise its full-year forecast from between $7.49 billion and $7.615 billion in net revenue to between $7.61 billion and $7.71 billion. However, McDonald cautioned that the global supply chain environment “remains challenging,” with long lead times and high shipping prices continuing to impact operational efficiency and eat into margins. Inflation has also driven up the cost of labor and raw materials, and the company said it would raise prices in the second quarter, though McDonald said Lululemon would take a “cautious” and “measured” approach to this strategy.
Lululemon’s re-commerce program, Lululemon Like New, which launched in the U.S. in April after a year-long pilot in California and Texas, allows the brand to circumvent some of the bottlenecks associated with creating and transporting new goods.