Last year, foot traffic to Lululemon and Athleta consistently outpaced 2019 levels, buoyed by the growing interest in health and wellness and the rising demand for comfortable clothes. With Q1 2022 behind us, and on the heels of Lululemon’s recent footwear launch, we dove back into the data to understand how this year is shaping up for these two athleisure category leaders.
Lululemon
The company that started out making yoga-focused apparel for women has consistently pushed the envelope to expand its product lines and target markets, and these efforts seem to be paying off. In 2014, Lululemon first introduced its menswear line, which has since become an important and fast-growing source of revenue for the company. Then, after arguably pioneering the athleisure category and liberating athletic-wear from the confines of the gym or studio, Lululemon set out to normalize “workleisure” apparel and push its products into even more spaces through its “Office Travel Commute” collection.
All these contributed to a strong 2021 for Lululemon, and it looks like growth is on track to continue in 2022. As people slowly leave their sweatpants to return to the office and other social obligations, apparel that can both look professional and feel good is in high demand – and Lululemon is reaping the benefits.
Despite the resurgence of COVID in January and February, Lululemon’s foot traffic numbers remained robust, with both overall monthly visits and monthly visits per venue numbers significantly higher than they were in 2019. Visit growth did slow down slightly in March, with year-over-three-year (Yo3Y) overall visits up by only 5.8% and visits per venue down by 1.1%. But given the wider context of inflation negatively affecting consumer spending, even these somewhat weaker March metrics are a testament to Lululemon’s current strength.
It is also important to note that the March visit numbers have yet to reflect the impact of the brand’s recently released footwear line, which represents the company’s first foray into the world of performance footwear. The brand’s “Blissfeel” sneakers, which became available on March 22, 2022, are one of four styles designed specifically for women, with the other three styles scheduled to launch in the fall and summer. A men’s line is planned for 2023. We will continue to monitor the brand’s offline traffic to assess the impact of this new venture.
Athleta
Like Lululemon, Athleta has been operating in the athleisure and “workleisure” space for quite a while, and has also benefited from the recent emphasis on apparel comfort and functionality. But whereas Lululemon’s current strategy involves ramping up its international presence, Athleta’s expansion is focused more on the North American market. As such, the company has opened 28 stores in 2021 – including two new stores in Canada – on top of the 9 new stores opened in 2020.
Athleta’s larger store fleet has provided a long-term boost to its overall visit numbers. After 2021’s 12 straight months of solid Yo2Y visit growth, Athleta started off 2022 strong, with monthly visits in January, February, and March up 35.5%, 39.2%, and 33.2%, respectively, when compared to the same months in 2019. But monthly visits per venue have fallen, with average foot traffic per store around 12% lower than it was in 2019. The decline is likely due to the difficult circumstances of the wider retail sector saw in Q1, as consumers went directly from dealing with a surge in COVID cases to dealing with a surge in inflation and gas prices.
Increased Competition
Some of the fall in foot traffic may also have to do with increased competition in the athleisure space. A look at the rise in cross-shopping from Athleta and Lululemon to Dick’s Sporting Goods illustrates this trend. Dick’s Sporting Goods launched Calia, its first private athleisure label, in 2015 in partnership with Carrie Underwood. In 2019, the retailer added a new brand, DSG, to capitalize on the success of its women-focused products. And in March 2021, Dick’s introduced a private men’s athleisure line, under the label VRST.
Since 2017, the share of Lululemon and Athleta shoppers who also shop at Dick’s has been steadily growing. Even if part of the increase in cross-shopping with Dick’s is due to the wide variety of products offered under the Dick’s umbrella, the retailer’s expanded men’s and women’s athleisure lines is probably winning at least some Lululemon and Athleta shoppers over.
Over the past several years, Gap Inc. has marketed Athleta as a value-driven brand committed to sustainability. Athleta also emphasizes its focus on women and women’s wellbeing; the brand, which has recently partnered with several high profile female athletes and celebrities such as Simone Biles and Alicia Keys, does not carry a men’s line. Meanwhile, Lululemon’s foray into footwear reveals that the brand may be interested in competing more directly with classic sporting goods retailers, such as Dick’s, that have encroached on the Canadian company’s athleisure turf. Given the overall growth in visits across the three retailers, it seems that there is more than enough athleisure demand to go around.
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