Lululemon Is Banking on Menswear for Long-Term Growth

Men are already shopping the brand, and new creative director Lee Holman will be tasked with attracting more of them.
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Soccer player Jay DeMerit at a Lululemon event in Vancouver. Photo: Andrew Chin/Getty Images

Soccer player Jay DeMerit at a Lululemon event in Vancouver. Photo: Andrew Chin/Getty Images

Lululemon has come a long way since a couple of public relations blunders in 2013 ushered in a period of customer alienation and declining sales and profits. The activewear company began to see marginal improvements in 2014, and a new women's pants line (the category in which those blunders originated) showed promise in 2015. As revealed Wednesday in the brand's full fiscal 2015 earnings report, those pants were a major growth driver: they contributed to a 17 percent revenue increase in the fourth quarter and a 15 percent increase for the year as a whole. The brand's yearly sales topped $2 billion for the first time, and its stock price was up 11.16 percent on Wednesday afternoon.

CEO Laurent Potdevin said during last year's earnings webcast that it was time for the company to start playing offensively instead of defensively. In that spirit, and buoyed by rising sales and investor confidence, he and CFO Stuart Haselden spent much of this year's webcast outlining their goals for Lululemon over the next five years. Numbers-wise, they intend to "double" revenue to $4 billion by 2020, with $3 billion of that coming from womenswear sales and $1 billion from mens.

Much of the responsibility for accomplishing that goal rests on the shoulders of Lee Holman, Lululemon's first ever creative director whom the company hired from Nike last fall. First, he'll be charged with extending the improvements made to women's pants and tops. But Potdevin and Haselden were even more emphatic about the potential of the menswear category, where growth accelerated significantly in 2015 and sales increased 20% on average each quarter. Holman alone will be tasked with expanding the category, as Pontedevin also announced that he had eliminated Felix del Toro's role as SVP of Menswear. Holman didn't talk much — only briefly after an analyst asked a question about product: He stressed the importance of "aligning [the genders] under one creative vision" and "having a pipeline of innovation for men’s and women’s."

It will be interesting to see how that menswear focus will translate to advertising and marketing, as Lululemon has henceforth always been perceived as a pretty feminine brand.

In addition to product improvements and expansion, the company plans to reach its lofty 2020 sales goals by building out its brick-and-mortar presence in North America (particularly the U.S.), international expansion in Europe and Asia, and ramping up digital initiatives to boost e-commerce sales.