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Lululemon stock down 41% YTD - perhaps due to failing quality and chief product officer resigned

This year, lululemon's stock price has fallen by 41%, becoming the weakest performing stock in the S&P 500 index.

This is a bit similar to the Bitcoin market!The ups and downs are thrilling! IF you know How to take profits and figure out the best way to exit the bull Bitcoin market,You must know what’s Next For Lululemon Stock This Year.





On May 22, Sun Choe, lululemon's chief product officer, resigned, the soul figure left, the management was reshuffled, and then the stock price fell another 7.8%.

Overall, whether it is performance growth or stock market feedback, lululemon's performance this year can be described as "cold".

How can people believe a company is worth 1/3 less of what it was just cause they said North America Sales are going to slow down a bit?

The most intuitive performance is that lululemon's sales performance in the "North American market" is not very optimistic!

You know, lululemon has created a growth myth in the past. From its founding in 1999 to its listing on the New York Stock Exchange in 2007, and then to a market value of over $50 billion in 2022, this achievement took Adidas 68 years, Nike 46 years, and lululemon only 22 years.

Even during the epidemic when Nike and Adidas had bleak sales, lululemon's revenue growth in the United States from 2021 to 2023 still reached 40.3%, 28.6% and 11.9%.

A pair of sports leggings costs $120. Lululemon sells ordinary sports equipment like luxury goods, earning 42 billion a year at its peak.

With the blessing of "technological functional fabrics", "designed body shaping", and its fashionable design different from traditional sportswear, lululemon's products are indeed more comfortable to wear, and many popular classic models have been born, with strong product performance. Just like Nike and Adidas transformed basketball apparel into a symbol of street fashion, lululemon has successfully promoted fitness and yoga to an iconic element of urban popular culture, coupled with high-end brand positioning, it has become a symbol of status and lifestyle.

Even if you don't do yoga, you can wear lululemon pants and sweatshirts to go out every day, which has become an unspoken inspiration and tacit understanding of urban trends.

Therefore, lululemon, Arc'teryx and Ralph Lauren are called "the three treasures of the middle class". Today, lululemon, whose sales have plummeted, may find it difficult to reproduce its former glory. The two main reasons for lululemon's fall from grace are precisely the "changes" in brand power and product power.

 The biggest change in lululemon is rooted in the change of marketing concepts, which is fully reflected in product design.

Since its birth, lululemon's brand positioning route has been clear and clear, and it makes money from wealthy women.

Founder Chip Wilson set a flag:
lululemon's target audience is high-income, highly educated "super girls", that is, Super Girls.

In the past, Super Girls who were around 30 years old, had an annual income of 100,000-150,000 yuan, and were highly educated liked to use the small logo on the back waist of yoga pants as their identity label, quietly showing their love of sports, fashion and uniqueness, and were willing to pay for this social currency symbol. When lululemon's business became bigger and stronger, it was difficult to avoid falling into the cliché narrative, and began to expand its customer base and diversify its categories to achieve "full coverage" and seek new growth.
As you can see, in the past two years, lululemon has torn off its own flag and made decisions that violate its purpose.

According to relevant investigations, lululemon has been punished many times for product quality problems, and women's yoga pants and men's down jackets have been named and suspected of "selling inferior products as good ones". Lululemon is often complained about poor quality, and it is exaggerated that the pants have holes twice, the shorts have pilling after less than three days of wearing, and common clothes have snags and plastic odors, etc., and they are frequently on the "blacklist".

This is related to lululemon's OEM production model that is highly dependent on suppliers.

You should know that lululemon's largest fabric supplier is from Taiwan, China, and in recent years, in order to control labor costs, lululemon has gradually moved to Southeast Asia. The outsourcing of production links and the different workmanship of suppliers in different places of origin have led to uneven quality of lululemon.

For this reason, some people have developed a "lululemon purchase guide" and are determined to select Chinese manufacturing. After all, they have paid a huge time cost and trial and error cost. The instability of the supply chain not only creates quality risks, but also creates the illusion of "hunger marketing". The gap in work efficiency often leads to a situation where either the quantity is limited or out of stock.

What's even more outrageous is that in China, lululemon is also suspected of secretly raising prices. Recently, some netizens found that the price of a product priced at 1,080 yuan online was 950 yuan when it arrived, exposing lululemon's pricing control loopholes.

The mismatch between high premium and low quality has caused lululemon's reputation to decline and user loss.

Besides these I think it includes a plethora of factors like:

  • As stated changes made to men’s clothes.Changing At Ease to essentially a “breakdown name”.

  • Heaps of product being made just to end up on markdown and to go to the outlets. Over-abundance of accessories (water bottles, scrunchies, keychains) in all the stores taking up space or product that has the most awkward proportions you can think of.

  • The so-called high-tech environmentally friendly fabrics developed in the past two years have caused their quality to decline rapidly, and have even been surpassed by Aloyoga.
  • Alienating the customer base and not being consistent with its core brand style (Yoga/Athleisure). Go into any store and you couldn’t even find a Yoga outfit for Men’s.

  • Not enough product diversity from its designers (Almost colors every week and no innovation: ABC Cargo Joggers would kill if they did it correctly). There a lot of missed opportunities with styles that could be introduced but ultimately never seem to make it to market.

  • Size inconsistency. I don’t agree with everything Chip Wilson has to say, but when it came to his “appeal to everyone” comment that has definitely been something that I’ve noticed with all these changes happening in a short amount of time. Sizing is all over the place in Men’s Pants and the company really thought they did some good work removing the back-seam and completely messing up size consistency. They’re also doing more size changes in the future.

At a time when consumption downgrade has become a trend, consumers have begun to seek cost-effective "substitutes", and lululemon's product strength advantage has been greatly weakened.

Of course, it is foreseeable that the increasing number of sports people, the new middle class and the wealthy county ladies can still bring new growth to lululemon and achieve efficient coverage and reach of the sinking market.

Maybe the stock market has too many secrets, just like today's Chinese A-share market and the poor real estate market! They have fallen by nearly half since 2018! We may not know the specific reasons, but we have reason to believe that there must be a huge financial group in the world quietly controlling all this! There is only one purpose, to absorb money from all over the world, so as to control people's bodies and souls.

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