Lululemon, No Longer Just for the Slim, Captures New Customers

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Lululemon Athletica Inc. -- whose founder once body-shamed women on live television -- is finding that offering larger sizes can pay off.

Sales of women’s garments rose 22% last quarter, reaching pre-pandemic growth levels, the company said on a call with investors after reporting third-quarter results that beat estimates. Executives didn’t specifically attribute the surge to the more inclusive sizing it just added to shelves, but analysts say the ability to pick up new customers in new body shapes is playing a major role.

“No other high-end brand has offerings that can be worn by so many,” Susquehanna Financial Group analyst Sam Poser wrote in a note to clients Friday. “Lululemon continues to attract more customers to the brand, retain its existing customers, and take market share during the pandemic.”

The company -- which recently began selling women’s clothes as large as size 20 -- started discussing internally the need to reshape sizing two years ago, right after Chief Executive Officer Calvin McDonald took the helm. It didn’t take long for management to conclude that the exclusive sizing the business retained for decades was hurting business. That marked a major shift from 2013, when company founder Chip Wilson infamously said his yoga pants weren’t for everyone.

Lululemon, No Longer Just for the Slim, Captures New Customers

Read More: Lululemon Analysts Shrug Off ‘Conservative’ View

“It wasn’t the brand we wanted to be,” McDonald said in an interview with Bloomberg News this fall when asked about the limited sizing. “It wasn’t a justified position under any circumstances.”

The CEO said the range was so narrow that many professional athletes weren’t even able to wear Lululemon’s leggings. The larger-sized products only hit store shelves this year because it took time to develop new silhouettes, he said, adding that the company should have made the change sooner.

The retailer began using plus-size models to promote its pants. Ads for Mirror, the in-home fitness startup it acquired in June for $500 million, also feature a variety of body types.

The wider assortment of sizing comes during an already big year for sportswear companies, who’ve benefited from a boom in comfy clothes as office workers stay home due to the pandemic. Lululemon’s shares are up about 50% this year, more than three times the gain in the S&P 500. They’re down Friday, falling as much as 6.2% after the company said its fourth-quarter revenue growth would trail its better-than-expected third-quarter results.

Public outcry against Wilson and his views on women’s bodies began in 2013, when he went into detail on Bloomberg TV about women whose thighs rub together. Shoppers were livid and a month later, Wilson stepped down as chairman amid the backlash. He left the board entirely in 2015 but remains a top shareholder. A representative for Wilson declined to comment.

When Wilson stepped aside, Laurent Potdevin, the former president of Toms Shoes LLC, joined as CEO. He didn’t change sizing either during his tenure, which ended in 2018 after it was revealed that he had an inappropriate relationship with an employee. McDonald joined in August 2018.

McDonald said new management was necessary for these changes to have a chance. “New leaders around the table were able to challenge the positioning of the brand,” he said.

©2020 Bloomberg L.P.

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