Lululemon CEO Says Why The Bubble Is Broken. Why?

Canadian fashion brand Lululemon founder Chip Wilson has always been unobstructed.

He had been forced to resign from the chairman of the board and signed a 2 year ban on the contract because he told the company that the name was because the Japanese could not get the L to be fun and "not the bad quality of the trousers but the customers were too fat" and left the board last winter.

Just after the 2 year contract, he made a website and placed an open letter to the board of directors as the largest shareholder.

The company has lost its way.

Hand over the sports and leisure market created by it to competitors Nike and Under Armour.

Since the management came to power in December 2003, Under Armour rose 79%, Nike 45%, and Lululemon fell 8%.

But the rise in Nike and Under Armour shares is not due to what he calls the sports and leisure wind (athleisure) market.

But Lululemon is indeed the leader in the market, and its yoga pants have set off this fashion trend.

Lululemon's first quarter earnings report released last month showed that sales grew by 17% over the same period last year, but profits fell by 7% over the same period last year.

Chip Wilson said he was disappointed and questioned the lack of urgency and ability of the management. He also accused the board of inaction, calling on shareholders to act and urge the board to re-election.

Recently, Lululemon CEO Laurent Potdevin said in an interview with CNBC that the sports and leisure market bubble is about to burst.

In fact, Nike, Adidas and so on have all expressed the overheated attitude of the market, but they did not use the word "bubble" directly like Lululemon.

Quite a number of brands have entered the campaign.

Louis Weedon, Vitoria's secret, Tory Burch, GAP, H&M, Beyonce, Fendi, Kate Hudson, including luxury electric business, have also released relevant channels.

Athleisure has even confirmed that it will be selected as the next version of Merriam Webster's dictionary, which is defined as "casual wear that can be exercised and worn at ordinary times."

They are breathable, comfortable, fast drying and well matched.

Breathable sports pants are represented.

According to New York Times, the sports leisure market is about 97 billion dollars, accounting for 29.34% of the total apparel industry.

The mainstream is the millennial generation. These young people born in 1980-2000 now account for 28% of the total population of the United States. They have more disposable income and spend more than 200 billion dollars per year. They are willing to pay for healthy, comfortable and fashionable lifestyles.

This group contributed 45% of tight women's sports pants sales, an increase of 24% over last year.

"

They replaced the jeans one by one.

Marshal Cohen, an analyst at global market research firm NPD group, said.

And the market looks cooling down.

Sport Chalet shut down 47 stores and electricity providers in 4 months this year, The Sports Authority5 closed or sold 140 stores in the month, Under Armour reduced the whole year's projected sales volume, Nike struggled with inventory pressure, Urban Outfitter opened the sports leisure brand just after 1 years, and another brand named The was fired by 35 people, that is, 10% employees.

"Bubbles will always break," analysts Jan Kniffen said that women would not wear yoga pants to Starbucks in the future. They would wear jeans, bell bottoms and even Bohemia long skirts.

This is not good news for Lululemon.

However, after the bubble burst, life style will always remain.

We have unique positioning, sports brand is not so high gross profit, fashion brands do not have this kind of technology thinking.

Now CEO says Lululemon is like a technology company. The cost of spending now will increase the profit margin.

Gross margin is expected to turn positive in the last three months.

To cope with the increasing competition, "we have redesigned women's garments that are not so tight, which are more suitable for daily walking."