Lululemon wants to double its revenue from yoga pants by 2023—and it won’t do so with discounts.

WHAT HAPPENED: Lululemon, known for its $100 yoga pants, wants to keep growing without discounts or wholesale, but its imminent debut of skincare and footwear suggests that the company needs new products to achieve its goal, even as it expands to new markets.

Why it matters

  • Aside from doubling its yoga pants sales, Lululemon seeks to grow its menswear business twofold by 2023, as well as quadruple international sales, and the company is moving in a variety of directions to do so. For one, it plans to open in more Asian markets (it currently operates in China, Hong Kong, Japan, Singapore and South Korea), as well as Europe, where it sells in Germany, Ireland, the Netherlands, Switzerland and the UK. It is also launching footwear and a selection of products specifically aimed at post-workout self-care, including deodorant and dry shampoo both online and at 50 of its 440 stores starting in June 2019. In 2018, the company also tested a loyalty program and this July, it will open a new Chicago store complete with a juice and food bar, three yoga studios and a meditation studio.
  • In 2018, Lululemon made $3.3 billion in revenue, placing it second only to Nike in the women’s activewear category, according to NPD Group. This is significant in a fast-growing market where Lululemon is seeing lots of competition, albeit mostly at a lower price. As you read in September, Gap is expanding Athleta and its menswear brand Hill City while Nike attempts to deepen its relationship with female shoppers, though the brand remains highly athletic in contrast to Lululemon’s “athleisure.” At the same time, Lululemon wants to grow out of that label, as its forthcoming product lines suggest. The main obstacle to Lululemon’s growth is its high price point, which will remain an issue even though its self-care products will be a much more accessible $12-25. On the one hand, it’s smart for the company to reject discounting and wholesale in order to retain high margins and a premium feel for the brand. But on the other, Lululemon’s push to foreign markets and interest in other higher-margin SKUs like footwear will be necessary to get new higher-paying customers to buy its more expensive products if it wants growth.