Lululemon’s plan to double its business and continue global expansion
31 Jan 2025
Lululemon Athletica, the Canadian activewear giant, is charting an ambitious course to double its business by focusing on category expansion, product innovation, and global retail growth. CEO Calvin McDonald, in a recent discussion with CNBC's Sara Eisen at the National Retail Federation conference in New York, shed light on the company's strategic vision.
A Journey from Sephora to Lululemon
Reflecting on his transition from leading Sephora Americas to steering Lululemon, McDonald emphasized his passion for retail and brand building. He recounted how a conversation with then-board chair Glenn Murphy led him to his "dream job," allowing him to merge his professional expertise with his personal passion for health and fitness.
Integrating Fitness into Corporate Culture
An Ironman enthusiast, McDonald highlighted how Lululemon's culture promotes community engagement through global activations. Employees and brand ambassadors participate in races worldwide, fostering a sense of unity and shared purpose. These events not only strengthen internal bonds but also enhance the brand's presence in diverse markets.
Impressive Financial Trajectory
Under McDonald's leadership since 2018, Lululemon has seen its stock triple and annual sales soar from under US$3 billion to a projected US$10.5 billion in FY24. The company is on track to achieve its FY26 target of US$12.5 billion ahead of schedule, building upon the success of its "Power of Three" strategy.
Strategies for Doubling the Business
McDonald attributes this growth to the brand's unique position across various wear occasions, extending beyond performance apparel. Originally a women's yoga brand, Lululemon now caters to both genders and offers products for activities like golf, tennis, hiking, training, and running. This diversification, coupled with global expansion into over 26 markets where the brand holds single-digit market share, underscores the significant growth potential ahead.
Product Innovation and Market Expansion
A key component of Lululemon's strategy is addressing unmet needs through innovative solutions. For instance, the company identified a gap in women's performance footwear, noting that most products were designed based on men's foot structures. By developing footwear specifically for women's feet, Lululemon aims to capture a significant market segment. Additionally, the brand is expanding its men's line, with plans to double this segment by 2026, offering products that blend performance and style for various activities.
Global Ambitions and Sustainability
Looking ahead, Lululemon envisions becoming a dominant global brand, aiming for 50% of its sales to come from outside North America. The company is also committed to sustainability, investing in textile recycling and circularity initiatives to lead in environmental responsibility within the apparel industry.
Through a combination of innovative product development, strategic market expansion, and a commitment to sustainability, Lululemon is poised to continue its impressive growth trajectory, solidifying its position as a leader in the global activewear market.