Lululemon is expanding its physical and digital footprint with new businesses overseas.
On Tuesday, the Vancouver-based sportswear giant announced plans to open two new stores in Spain in September. The move is part of the company’s “Power of Three × 2” growth plan to quadruple its global revenue in 2021 to $12.5 billion by the end of 2026.
With more than 550 stores in North America, Asia, Australia, the UK and Europe, these openings represent Lululemon’s first step into a new European market in two years. The stores will be located in the Calle Serrano de Madrid and Paseo de Gracia de Barcelona shopping areas. The sportswear brand will also launch a Spanish e-commerce site, lululemon.es, at the end of July, selling clothing and accessories for men and women.
“As a brand that supports well-being, Lululemon has a strong synergy with the active and balanced lifestyle enjoyed in Spain,” said André Maestrini, Lululemon’s international executive vice president, in a statement. “The strength of our model in product innovation, customer experience, community and culture provides a unique advantage as we introduce lululemon to our new market.”
Lululemon operates nearly 40 stores in France, Germany, Ireland, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. It ships to other countries without a physical presence through its European website.
“We look forward to meeting Spanish customers, through our website and when we open our first retail stores in Madrid and Barcelona,” said Maestrini.
CEO Calvin McDonald said earlier this year that he expects to see a compound annual growth rate of 15% over the next four years. The company’s menswear and digital business has doubled in the past two years — a full year ahead of the company’s projections — and Lululemon expects to quadruple its international business from 2018 numbers by the end of this year. year, he added.
In the quarter ending May 1, year-over-year net revenue rose 32% to $1.6 billion, prompting the company to raise its guidance for the ‘full year of $7.49 billion to $7.615 billion in net revenue to between $7.61 billion and $7.71 billion. However, McDonald’s warned that the global supply chain environment “remains challenging”, with long lead times and high shipping prices continuing to impact operational efficiency and eat into margins. Inflation also drove up the cost of labor and raw materials, and the company said it would raise prices in the second quarter, although McDonald’s said Lululemon would take a “cautious” approach and “measured” of this strategy.
Lululemon’s re-commerce program, Lululemon Like New, which launched in the US in April after a year-long pilot in California and Texas, is helping the brand bypass some of the bottlenecks associated to the creation and transport of new products.
