Is Lululemon Effectively Expanding Its Store Base?

November 28th, 2016 by Trefis Team
-15.39%
Downside
379
Market
321
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LULU: Lululemon Athletica logo
LULU
Lululemon Athletica

For a retail company, it is essential that customers have easy access to its products. Sales and ease of access are directly correlated. Such is the case when it comes to Lululemon Athletica‘s (NASDAQ:LULU) business.

Over the past five years, the company has worked hard to increase the store base worldwide. But how is this strategy working for the company?

Screen Shot 2016-11-21 at 4.37.48 PM

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As one can see from the table above, Lululemon’s net revenue per store has fallen substantially over the five year time period. Given the way things are going, it might be worthwhile for the company to concentrate more on its e-commerce platform and expanding that in order to make up for the losses sustained here. Furthermore, it may make sense to reduce expanding its store base in the near term as the strategy is clearly not working in the company’s top-line’s favour.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Lululemon Athletica

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