Lululemon launches pop-up shops
Alternate marketing part of push to restore image, boost sales
— Lululemon is opening 14 pop-up shops across Canada and the U.S. to showcase the brand to customers in “unexpected ways” as it fights to restore its weakened image, its CEO told analysts Thursday.
A day after company founder Chip Wilson accused the retailer’s board of straying from the positive culture and “core values” of innovation he built in crafting the brand, executives faced analyst questions about what prompted the company to cut annual revenue and profit guidance.
“We still are seeing a deceleration in (same-store sales) coming in to the second quarter,” chief financial officer John Currie said during a first-quarter conference call, with promising increases in store customer traffic but lower sales at its 263 stores worldwide.
“It still is prudent to be conservative, and expect that the underlying trend continues for the time being.”
After the retailer’s most difficult year since its inception in 1998 — including a costly recall of overly sheer athletic pants — new CEO Laurent Potdevin is steering the company through a transitional year as it takes steps to speed up its supply chain, improve quality control measures, increase assortment in men’s and kids’ apparel, and better gauge customer sentiment and awareness through new customer analytics tools.
“We have never used a lot of data in the history of Lululemon and we are shifting that as quickly as possible,” Potdevin said.
Asked to comment on morale after Wilson’s unsuccessful bid to vote out board chair Michael Casey and director RoAnn Costin on Wednesday, Potdevin had nothing to say about the board activity, but added executives had talked with staff about the feud.
Staff “are the face of our brand (and) they deal with our guests every day, so personally we have made their lives more difficult in the last year,” he said.
Since the arrival of Potdevin, former head of Burton Snowboards, in January management has been working on a four-year roadmap to increase the retailer’s store footprint in Europe, Asia and other international locations. By then, North America will have an estimated 350 Lululemon stores.
In addition to trying to boost revenue through the pop-up stores, all of which have leases of less than six months and will wind up in September, the retailer is assessing job functions at its Vancouver headquarters, hoping to free up designers to spend more time on product designing as it strives to create more sport-specific technical athletic apparel.
Nevertheless, with a ninemonth period between when goods are ordered and when they show upon store shelves, the company is still working its way through merchandise ordered in the frenzied wake of last year’s recall and before the arrival of chief product officer Tara Poseley last October.
She was brought in to spice up and improve product design as Lululemon battles Under Armour and Nike for market share.