Lululemon, once dubbed the "king of yoga wear," is accelerating its push into Asia, including Korea and China. As its brand footing wobbles in North America, the company is moving to expand its presence with a focus on Asia, where growth potential remains.
According to the related industry on the 20th, Lululemon has recently been expanding customer touchpoints by increasing domestic stores while energizing its community around yoga and running. By store, it converts into a studio before and after business hours to run experiential programs such as yoga classes.
Campaigns featuring influencers such as CrossFit athlete Amotti and dancer LIP J, as well as celebrities like LE SSERAFIM's Kazuha as ambassadors, have become more frequent. In the past, active yoga instructors and trainers closer to ordinary people, rather than popular stars, were often selected as ambassadors. Ambassadors attend various brand events to hold classes or introduce flagship products in their own ways.
In a few years, the product lineup has expanded from yoga to training, running, golf, tennis, and everyday wear, while the men's market is also being actively targeted. At the end of last year, the country's first flagship store, which opened in Yeoksam-dong, Gangnam-gu, Seoul, set up the brand's first dedicated floor for men.
Behind Lululemon's push to expand its brand influence in Korea is a slowdown in the North American market. Having led the North American athleisure (everyday athletic wear) trend in the 2010s and grown rapidly, the company's momentum has stalled amid overheated competition and internal management discord. Its share price has fallen more than 40% just this year.
Competition in the North American athleisure market is changing quickly. As emerging premium brands such as Alo and Vuori rise and established sports brands like Nike and Adidas expand athleisure lines, Lululemon, once the front-runner, is seeing its position gradually narrow.
Many say Lululemon's image as premium yoga wear is not what it used to be. Repeated quality controversies have weakened responses to new products, and discount events have increased. Early this year, a flood of consumer complaints that a new leggings line was excessively see-through disrupted sales.
Since the end of last year, a management control dispute has also continued. Chip Wilson, Lululemon's founder and one of its largest shareholders, has been at odds with the chief executive officer (CEO) and the board. In December last year, when CEO Calvin McDonald stepped down without a successor, Wilson demanded the board be reshuffled before appointing a new CEO.
As concerns about Lululemon's management uncertainty persisted, the company last month appointed Heidi O'Neill, formerly of Nike, as its new CEO. But the fact that her full term begins in September and that investor dissatisfaction with O'Neill remains high are lingering variables. O'Neill was reportedly involved in management-related missteps during her time at Nike.
While momentum has remained sluggish in North America, growth has continued in Asia, centered on China. Last year, Lululemon's sales in North America, including the United States and Canada, declined 1%, while sales outside North America rose 22%. Of that, sales in China increased 29%, driving overall results.
In Korea's market, the company appears to be going beyond simple expansion in scale to use it as a kind of bridgehead for testing responses to new products and marketing strategies. Global brands like Lululemon cite Korea as a key market with strong demand for premium products and high sensitivity to changing trends.
Lululemon Athletica Korea, Lululemon's Korean subsidiary, saw a significant improvement in results last year. Lululemon Athletica Korea's sales last year were about 219.7 billion won, up 40.2% from a year earlier. During the same period, operating profit rose 78.1% to about 11.4 billion won, and net profit rose 124.2% to about 7.4 billion won.