Lululemon to Offer Memberships
A $12.5 Billion Revenue Goal
Upscale fitness apparel retailer Lululemon (LULU) has ambitious plans to double its revenue by 2026. The company has traditionally focused on chic women’s athletic wear, with yoga pants going for $100 a pop.
Lululemon recently announced plans to expand into men’s fashion, as well as apparel for tennis and golf. The company is also pushing into Europe and China. Following past success offering workout classes, the company is now planning paid memberships that come with numerous benefits.
Membership details are still being finalized. There will be a free option which will offer customers early access to new products, allowing Lululemon to build customer loyalty, and its email list. Additionally, there will be a $39-a-month option with more perks, such as workout classes and in-person events.
Initial participation in the fitness classes will require owning a “Mirror” device that currently retails for $1,400. The company has plans to make the classes available on other devices, such as laptops and phones, possibly as early as this year.
Some market observers question the likelihood of Lululemon’s membership plan producing profits. The company will face competition from Apple Inc’s (AAPL) fitness app, Peloton (PTON), and other smaller operators. A similar initiative pursued by Under Armour (UAA) failed. The clothing retailer purchased the nutrition-tracking app MyFitness Plan for $475 million in 2015, only to sell the app five years later at a $130 million loss.
Ultimately, the fitness shopper will decide where to showcase their pricy, fashionable workout wear. Lululemon hopes its gear is being worn — during its new digital classes.
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