Lack of fabric patents has become the biggest weakness of the yoga clothing brand Lululemon

Canada's famous yoga apparel brand Lululemon not only faces the overall downturn in the North American sportswear industry, but also guards against the eye-catching e-commerce giant Amazon. The fierce competition in the United States has led Lululemon to focus more on overseas markets.

Recently, it is reported that Amazon is recruiting large-scale sportswear suppliers to build its own sports brand and enter the field of sportswear. According to sources, Lululemon's top supplier, EclatTextile Co., has been manufacturing clothing for Amazon since August this year, and the news has attracted special attention from the industry.

For Lululemon, Amazon's new sports brand will divide its market share and squeeze its profit margin. EclatTextileCo. has long been helping Lululemon develop its iconic Luon fabrics, as well as other new materials. Although Lululemon has dozens of patents, most of these patents are related to design, not fabric.

According to CanaccordGenuityCorp. Analyst CamiloLyon: "Lululemon can't use intellectual property to resist Amazon's market share. Without a patent, it's not wise to share suppliers. Amazon will use its strong price advantage to improve The popularity of its new sports brand. If Amazon's new sports brand launches products that are comparable in quality to Lululemon's products and have a price advantage, then Lululemon's original follow-up fashion customers are likely to be the first to turn to Amazon."

Within two days after the announcement, Lululemon's share price fell nearly 4%. CamiloLyon rated Lululemon's stock as "selling" and expects the stock price to continue to fall to $43.

North American sports market downturn

In addition to facing competition from Amazon's new sports brand, Lululemon is also facing a downturn in the North American sports market.

WellsFargoSecurities analyst Tom Nikic said in a report last month that in the past few years, consumers have flocked to Nike, Lululemon and UnderArmour sportswear. But consumers now have enough of these clothes, coupled with the bankruptcy of some sports retailers and the stagnant product innovation, the development of the sports and leisure industry may slow down. Nikic said: "Overall, the whole industry is taking a break."

Lululemon announced its second-quarter results in August: net profit decreased by 10% year-on-year, net sales increased by 13% year-on-year, and same-store sales increased by 7% year-on-year, which is one of the relatively good brands of North American North American sports brands.

Despite the overall unfavorable environment, Barclays Research's Matthew McClintock is still optimistic about Lululemon's stock performance, he said: "We are still optimistic about Lululemon, the company's second quarter performance proves that they have not suffered from the pressure on the sports and leisure industry. ."

Earlier this month, TanaTelsey of TelseyAdvisoryGroup said: "Lululemon's recent performance and its long-term prospects will keep its share price rising. We see the power of the brand Lululemon, the company's control over distribution and its specific category of consumption. The continued appeal of the people ensures that they are not affected by the overall industry trends."

Focus on overseas markets and men's wear categories

Although Lululemon's performance has improved this year, it is also facing more serious competition in the yoga pants and other sportswear market. The brutal market environment in North America has forced Lululemon to seek growth overseas.

Recently, according to Lululemon's CEOLaurentPotdevin, he has had preliminary talks with Alibaba executives including Ma Yun on the development of the Chinese market at the CanadaGateway event at the end of September.

Alibaba has been saying that it is working hard to establish a new retail environment in China, calling it "NewRetail". One of CanadaGateway's spokesperson declined to comment on the conversation between LaurentPotdevin and Ma Yun, but he pointed out: "In China, online retail consumption accounts for only 18% of total consumption. The 'new retail' strategy will help traditional physical brands And retailers use Alibaba's technology to change the way they engage consumers and provide consumers with new, more digital ways to shop."

LaurentPotdevin also agrees with Alibaba's new strategy. He added that many stores in the mall have now begun to get rid of the traditional physical retail model, using a large amount of retail space to provide customers with a variety of unique experiences and services. For example, Lululemon will provide yoga courses for customers in the store. In August of this year, Lululemon also opened the first meditation space called Mindfulosophy, allowing customers to meditate and relax.

According to LaurentPotdevin, Lululemon's strong sales performance in China is partly due to the increased efficiency of new stores and the rapid growth of its Tmall sales (up 175% year-on-year). Lululemon's growing influence in China will help the brand achieve its goal of exceeding $1 billion in international sales by 2020.

LaurentPotdevin said: "We will customize different products according to the local market and community. We have 2,500 brand ambassadors around the world, they will keep up with the market dynamics. Understand what consumers want and bring more to the company. Customers. At present, sports products are starting to pay more attention to fashion on the basis of practicality. Lululemon has both fashion sense and practicality, which gives us a great competitive advantage."

Lululemon said that by 2020, annual sales in the digital sales channel, North American market and men's apparel will reach US$1 billion, and the overall brand sales are expected to reach US$4 billion. Lululemon's current annual sales of men's apparel is about $500 million, accounting for 20% of total sales, and has become a new important growth point for the group.

Editor in charge: Xu Yuehua