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Why This Retail Expert Says Goldman's Lululemon Downgrade Is 'Completely Overblown'

Why This Retail Expert Says Goldman's Lululemon Downgrade Is 'Completely Overblown'

Retail expert and Talented Blonde CEO Kristin Bentz told Benzinga that the Goldman Sachs downgrade of Lululemon Athletica inc. (NASDAQ: LULU) was unexpected and completely overblown.

"If you read the comments in the note, they are calling it best-in-class but then putting a Sell on it. It's ridiculous," she said.

Bentz added that everyone should be buying weakness in the stock here. A former Lehman Brothers analyst, Bentz is not a holder of the stock and has no vested interest in the company other than the fact that she has followed it since its IPO in 2007.

New Management

Bentz's argument for Lululemon is that the company is evolving, not static, which is what investors want to see.

"Yes, there are a lot of new entrants [to the space], but this is the sweet spot of technology, fashion and brand loyalty," she said.

A little more than a year ago, Lululemon recently brought on a new CEO, Laurent Potdevin, who before that served as president of Toms Shoes.

"Lululemon is getting back its project mojo under its new management," Belus Capital Advisors CEO Brian Sozzi told Benzinga on Thursday.

Bentz also said that Laurent is building the brand and taking it from just a technical apparel company and turning it into a lifestyle brand.

From The Studio To The Street

The key element of Lululemon's current strategy, Bentz explained, is the evolution of 24-hour fashion. She said the company is evolving to go from the studio to the street.

On the company's website, a "How We Wear It" section shows the core customer wearing the product in everyday life.

"They already understand that their customer wants to wear Lululemon as part of their lifestyle, whether they're picking up the kids or on a date or at the market," Bentz said. "This is one part of a bigger story, which is the evolution of athleisure and technology as fashion."

Athleisure Is Not A Trend

Finally, Bentz argues that the athleisure movement is not a trend.

"Trends are fleeting. Like Juicy Couture -- that was a trend," she said.

Instead, Bentz believes that athleisure will be a lifestyle, and Lululemon is taking the gloves off and will take off like a shot.

Image credit: Elvert Barnes, Flickr

Posted-In: Athleisure Goldman Sachs Kristin Bentz lululemon retail Talented BlondeAnalyst Color Exclusives Best of Benzinga


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