Lululemon dominated the pricey athleisure market for years. Now it faces big competition

Lululemon, maker of the pricey yogawear sported by seemingly everyone from Pilates moms to college students to preteens in the US, is at a crossroads.

Lululemon, maker of the pricey yogawear sported by seemingly everyone from Pilates moms to college students to preteens in the US, is at a crossroads. For over a decade, the company has fought off competitors like Athleta and Nike to dominate the luxury athleisure market, managing to grow despite the lightning rod of controversies that followed its founder. Its soft, colorful, $98 leggings and viral beltbags have attracted an even younger demographic, a huge plus for any retailer. But, while the skin-tight look shot Lululemon to fame, it now must navigate a new, baggy pant-loving Gen Z demographic and the radical reshuffling of its own executive team. Lulu stock is down almost 40% year to date but rose more than 10% after hours on Wednesday. Macroeconomic headwinds are hitting many peer retailers, of course. But Lulu is also coping with the addition of trendy, celebrity and influencer-backed competitors like Alo, which is known for its monochromatic, chic sets, and Vuori, which carved out a space for itself in men’s athleticwear. And the company blamed its slower North American sales on its own actions: It just didn’t have enough sizes and colors in stock for its youngest customers. Lulu recently announced that its chief product officer – considered by Wall Street a key engine of its success – was leaving just ahead of its first quarter earnings release Wednesday. Lululemon announced it was raising its stock repurchase program by $1 billion. The company also maintained a brighter outlook for the year, saying it expects its net revenue to be between $10.7 billion and $10.8 billion, which could help calm down investors who are worried about slowed growth. Sun Choe, who had been Lululemon’s creative mastermind, resigned to join Vans as its global brand president.