Market Overview

Lululemon Will Enter The Shoe Game: Here's Why It's Important

Lululemon Will Enter The Shoe Game: Here's Why It's Important

Lululemon Athletica inc. (NASDAQ: LULU) said Wednesday it's finally making its own footwear line.

What Happened

After previously partnering with sneaker brand APL, and presumably seeing how many pairs it was able to sell, Lululemon CEO Calvin McDonald said he learned a lot through the collaboration and is ready to start selling branded footwear.

“We tested and we learned a lot on footwear and what we learned is: The guest resonates with us selling footwear,” Bloomberg quoted McDonald as saying. “We believe we have identified an opportunity that will be unique to us in the marketplace.”

How the company will differentiate its footwear line remains to be seen, but the brand has a cult-like following and if it can come up with another hit product, the payoff could make the decision look very adept.

Why It's Important

Sneaker expert Matt Powell told Benzinga last summer a footwear line from Lululemon could potentially surpass its apparel sales if the right customer is reached.

“It is hard to start a footwear brand, but not impossible,” Powell said at the time. "With the sensibility of the brand and their extremely loyal following, they could use that to their advantage."

Lululemon is arguably the only company that has enough momentum in the athleisure space to be able to come into the footwear industry and steal market share from giants Nike Inc (NYSE: NKE) and Adidas AG (ADR) (OTC: ADDYY). With how laser-focused both brands are on appealing more to the female-demographic, Lululemon infringing on that turf could create a headache for the footwear giants.

What's Next

Given how Lululemon is coming into favor with the Gen Z cohort, after reaching new survey highs in Piper Jaffray’s semi-annual Taking Stock With Teens survey, it appears to be a good time for the brand to throw their iron into the footwear fire.

Lululemon's stock traded around $177 per share at time of publication.

Related Links:

Bank Of America: Expect Lululemon To Continue To Take Market Share

Lululemon Has Room For Valuation, Earnings Upside This Year

Posted-In: Calvin McDonald Matt PowellAnalyst Color News Retail Sales Top Stories Media Best of Benzinga


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