Lululemon pushes for global growth, expands footwear to Australia

Multi-billion dollar activewear retailer Lululemon lunges forward with its global growth ambitions, which includes the expansion of its footwear range into the Australian market.

Activewear brand Lululemon is expanding its footwear range into the Australian market

Activewear retailer Lululemon is going for growth in the Australian market by way of product expansion, with the launch of its footwear range that will land in a select number of stores across the country next month.

The 25-year-old direct-to-consumer business first started as a yoga wear brand and has operated in the Australian market for the past two decades. Over the years, it has expanded its product range and number of stores, and even ventured into menswear. It has built not only an internationally recognisable brand around its product, but also a community of customers, known as “guests”.

Between 2018 and 2021 revenue grew from $3bn to $6.25bn, fuelled by the company’s “power of three” strategy that spans product innovation, guest experience and market expansion.

The company has set a target to reach $12.5bn in revenue by 2026, which it intends to achieve via its “power of three x2” plan, under which the company will “double down” on those three growth channels.

Lululemon vice-president of Australia and New Zealand Paul Tinkler explained: “Our strategy includes a plan to double men’s and digital revenues, and to quadruple international revenues relative to 2021, while continuing to grow core areas of the business.”

In 2004, Australia was the first international market that Lululemon expanded to outside of the US, with its first location on Melbourne’s Chapel Street.

“We are excited about the growth opportunity we see in Australia and New Zealand as the largest international market outside of China,” Mr Tinkler said.

The company has also expanded its retail footprint in Australia in recent years. In Australia alone, it has grown the number of stores by 25 per cent since 2017.

It has also recently opened a new distribution centre in Australia, which is four times larger than its previous one.

“These initiatives and their results demonstrate our ongoing ability to grow in areas where we have a more established presence,” Mr Tinkler added.

The footwear range was first launched in 2022 in the US mainland, China and the UK. It was created for existing Lululemon customers – and also to draw new customers in.

Lululemon senior vice-president of footwear Simon Atkins said: “We have a super impressive community of guests who are very connected to Lululemon. Inevitably, they’re initially the first ones who are most excited. What we are certainly seeing is, as we enter into footwear, as we expand into other categories, an opportunity to attract additional guests.

“What we are finding is that as we invest and talk about footwear, we’re seeing positive momentum on adjacent categories that have nothing to do with footwear, which just shows the opportunity that footwear can play in our broader business.”

The footwear retail industry is a competitive one, with an abundance of options for consumers across “performance” products designed for sports, as well as casual sneakers. However, Lululemon looks to carve its own path, having identified a space for a “female first” product, which marked the genesis of its women’s range.

“When you look at the footwear landscape overall, actually it is a pretty clear one – which is that in performance product it is ­generally a male-first approach,” Mr Atkins said.

“And then those models or those products are then taken down into women’s. We launched first and foremost with women’s, because we saw the ground-up ­opportunity to create a product that’s uniquely tuned for her.”

The footwear collection took four years for Lululemon to develop, led by a team in Portland, Oregon in the US.

“We’re a small and growing part of our business … but we have big plans for footwear in the longer term,” Mr Atkins said.