Buying Team Assignemnt Part 3: 6 Month Buying Plan Elinor Hilton, Sara Lacusky, Jillian Borms
CONTENTS HISTORY/ BACKGROUND MISSION STATEMENT BRAND IDENTITY SIZE OF LULULEMON PRODUCT CATEGORY FASHION/ LIFESTYLETRENDS 6 MONTH BUYING PLAN STORE PLANS ASSORTMENT PLAN RISK/ OPPORTUNITY
HISTORY / BACKGROUND
Founded by Chip Wilson in Vancouver, Canada in 1998, lululemon is a yoga-inspired, technical athletic apparel company for women and men. Originally started as a design studio / yoga studio. Eventually in November of 2000, at West 4th Avenue in Vancouver’s Kitsilano neighborhood, became Lululemons first standalone store. At first, the company started out as strictly women’s yoga wear, but now as grown to an overall athletic apparel company and designer.
MISSION STATEMENT Lululemon is different from other brands in the case that they do not have a traditional mission statement like other brands do. Instead, they have what they call a ‘Lululemon Manifesto’. The manifesto essentially a list of feel-good affirmations: “breathe deeply”
“friends are more important than money”
“sweat once a day to regenerate your skin”
“the pursuit of happiness is the source of all unhappiness”
“this is not your practice life. this is all there is”
“do one thing a day that scares you”
“your outlook on life is a direct reflection of how much you like yourself”
The manifesto illustrates the lifestyle that they participate with and share, along with the positivity the company aims to exude.
BRAND IDENTITY According to Wilson, the company’s initial vision was to be a, “Community hub to provide our guests with knowledge, tools and the components for people to live longer, healthier and more fun lives.” Lululemons overall vision is that they want to, “Elevate the world from mediocrity to greatness.” This positive message has resonated with lululemon fans across the globe. Lululemon wants to highlight and emphasize the yoga culture and spirituality and combine it with its own cultural identity. Lululemon is built on high-quality, high-styled and high-performance products suitable for most active sports.
SIZE OF LULULEMON Lululemon Athletica has brick and motar stores across the globe. As of Decemeber 6, 2018, the company operates 426 stores in the United States, Australia, New Zealand, Canada, the United Kingdom, and Singapore. Brick and Motar stores are a big part of helping with Lululemons brand identity. Lululemon believes that its stores help the company connect with customers and recieve feedback on products, while also reinforcing the brand.
BEYOND BRICK AND MOTAR
In addition to brick and motar stores, the company also sells its products to wholesale customers such as fitness centers and yoga studios. The company also generates revenue through online sales from their lululemon and Ivivva websites. Other sales include warehouse sales and sales through showrooms and temporary locations.
PRODUCT CATEGORY: MENSWEAR Lululemon is amping up and reidentitfying their menswear product categories. “About 40 percent of our men’s product sales today are to women,” says Stuart Haselden, Lululemon’s COO. Lululemon reported a 21% increase in new male customers during the third quarter last year. The company states its goal is to reach $1 billion in men’s sales—representing a quarter of its business—by 2020. The brand’s marketing to men has focused mostly on the technical advantages of the clothes. Things such as sweat-wicking pace breaker shorts and shirts with “anti-stink technology,” which means the material’s fibers have metallic silver bonded to the surface to keep odor-causing bacteria from growing.
FASHION TREND: BEYOND THE GYM
Athletic brands are incorporating more stylish pieces for everyday use beyond the gym with the rise of athleisure. Lululemon is currently introducing items like this into their menswear line and expanding upon that could prove to be a great opportunity for sales. Lululemon Lab- A Lululemon branch with separate designated designers and store spaces created to target more of a fashion concerned customer. Lululemon has also recently collaborated with designer Robert Geller to create a 12 piece capsule collection.
LIFESTYLE TREND: PLUS SIZE The plus- size market is a billion-dollar market that brands and retailers have been neglecting for years now. With lululemon now begin to introduce and revamp their menswear line, this is a potential opportunity to think about. Plus-size menswear customers are particularly loyal. According to a report by Verdict Retail, 57.9 percent of “big and tall” menswear shoppers “agree that they would spend more on clothing if there was more choice available to them.” In 2014, the menswear sector outpaced womenswear in terms of growth for the second year in a row — a trend that is expected to continue until 2019, at which point menswear is expected to contribute $39.7 billion in sales to the global apparel market, according to Euromonitor. Outsize menswear will follow the recent growth of the plus-size women’s market. “If it’s men’s fashion now, plus-size fashion will be next,” says Leo Park (owner and founder of Parker and Pine). “It’s natural progression.” However, Lululemon barely even offers plus-size option for women, with limited options of size 14 at the biggest.
LIFESTYLE TREND: NEW WAVE MASCULINITY
The current generation of men are denying traditional ideals of masculinity and taking greater interest in activities such as yoga. Up until recently, however, yoga has been perceived as being too easy, too “spiritual,� and too feminine. Currently, 28 percent of all yoga practitioners in the United States are male, up from 17.8 percent in 2012. The market for mens beauty and fashion products has also grown as men show more of a desire to uphold personal wellbeing, cleanliness, and style.
6 MONTH BUYING PLAN: LULULEMON FASM 245 Retail Buying Simulation Lululemon 6 Month Buying Plan Fall 2019 (000's)
Retailer: Lululemon Region: US/Canada Focus Product Category: Menswear Fall 2019 Plan Net Sales, Fall 2019 Est. Net Sales, Fall 2018 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %: (000's) Net Sales % Fall Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost
August 33264.0 14.0% 126403.2 3.8 136857.6 2851.2 8.0% 46569.6 18222.9
237600.0 198000.0 20.0% 125368.0 1.9 35640.0 15% 60.9% September 42768.0 18.0% 136857.6 3.2 129254.4 5346.0 15.0% 40510.8 15852.1
18 34 15 IMU % = Profit + Expenses + Reductions - Cash Discounts + Alt. Costs Net Sales + Reductions 100
IMU= Cost % =
60.87% 39.13%
Fall 2019 6 Month Buying Plan October November December January 38016.0 42768.0 52272.0 28512.0 16.0% 18.0% 22.0% 12.0% 129254.4 132580.8 141134.4 108345.6 3.4 3.1 2.7 3.8 132580.8 141134.4 108345.6 103000.0 5346.0 7840.8 8910.0 5346.0 15.0% 22.0% 25.0% 15.0% 46688.4 59162.4 28393.2 28512.4 18269.4 23150.5 11110.4 11157.0
Fall 2019 237600.0 100.0%
35640.0 100.0% 249836.8 97762.2
STORE PLANS: 5TH AVENUE FASM 245 Retail Buying Simulation 6 Month Buying Plan Fall 2019 Retailer: Lululemon Store: 5th Ave. Focus Product Category: Fall 2019 Plan Net Sales, Fall 2019 Est. Net Sales, Fall 2018 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %:
Mens
2520.0 2100.0 20.0% 1035.8 2.43 378.0 15.0% 60.87%
(000's)
Fall 2019 6 Month Buying Plan
Net Sales % Fall Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost
August September October November December January 352.8 453.6 403.2 453.6 554.4 302.4 14.0% 18.0% 16.0% 18.0% 22.0% 12.0% 952.6 1088.6 1048.3 1134.0 1219.7 907.2 2.7 2.4 2.6 2.5 2.2 3.0 1088.6 1048.3 1134.0 1219.7 907.2 900.0 30.2 56.7 56.7 83.2 94.5 56.7 8.0% 15.0% 15.0% 22.0% 25.0% 15.0% 519.1 470.0 545.6 622.4 336.4 351.9 203.1 183.9 213.5 243.6 131.6 137.7
STORE PLANS: ORLANDO FASM 245 Retail Buying Simulation 6 Month Buying Plan Fall 2019 Retailer: Lululemon Store: Orlando Focus Product Category: Fall 2019 Plan Net Sales, Fall 2019 Est. Net Sales, Fall 2018 Plan % Last Year: Average Stock, Retail: Inventory Turnover: Planned Reductions, $: Reductions % Sales: Plan IMU %:
Mens 1200.0 1000.0 20.0% 481.5 1.9 180.0 15.0% 60.9%
(000's)
Fall 2019 6 Month Buying Plan
Net Sales % Fall Plan BOM Stock Stock / Sales Ratio Plan EOM Stock Plan Reductions % Fall Purchases, Retail Purchases, Cost
August September October November December January Fall 2019 144.0 204.0 192.0 216.0 252.0 192.0 1200.0 12.0% 17.0% 16.0% 18.0% 21.0% 16.0% 100.0% 388.8 469.2 480 518.4 554.4 480.0 2.7 2.3 2.5 2.4 2.2 2.5 469.2 480.0 518.4 554.4 480.0 480.0 14.4 27.0 27.0 39.6 45.0 27.0 180.0 8.00% 15.00% 15.00% 22.00% 25.00% 15.00% 100.00% 238.8 241.8 257.4 291.6 222.6 219.0 1471.2 93.4 94.6 100.7 114.1 87.1 85.7 575.7
481.5
ASSORTMENT PLAN Planned Purchases, Retail 249836.8 Casual Wear25%
62459.2
Active Wear 75%
187377.6 Tops:
Bottoms:
Running Shorts Budget Size XS S M L XL XXL
Size/ Color Solid
XS S M L XL XXL
Short Sleeves Long Sleeves Tanks Sweatshirt Jackets
30% 30% 10% 10% 20%
28,106.6 28,106.6 9,368.9 9,368.9 18,737.8
93688.8 Yoga Pants Sweat Pants Joggers Shorts Tights
10% 20% 25% 40% 5%
9,368.9 18,737.8 23,422.2 37,475.5 4,684.4
Budget
Color
2,623.3 7,495.1 9,368.9 7,495.1 6,745.6 3,747.6
2098.6 5996.1 7495.1 5996.1 5396.5 2998.0
50%
93688.8
Joggers
37,475.5 7% 20% 25% 20% 18% 10%
50%
Pattern
524.7 1499.0 1873.8 1499.0 1349.1 749.5
Solid Pattern
80% 20%
100%
23,422.2
Size XS S M L XL XXL
Size/ Color Solid XS S M L XL XXL
7% 20% 25% 20% 18% 10%
1311.6 3747.6 4684.4 3747.6 3372.8 1873.8
1639.6 4684.4 5855.6 4684.4 4216.0 2342.2
Pattern
327.9 936.9 1171.1 936.9 843.2 468.4
Color
Solid Pattern
80% 20%
OPPORTUNITY The menswear industry is presently expanding by a 2% compound annual growth rate,and is expected to outperform womenswear by 2020. AfterLululemon released their first male targeted campaign, they experienced a 21% increase during the 2018 third quater. Currently, Lululemon’s goal is to obtain a $1 billion dollar menswear departement by 2020. Given the lifestyle and fashion trends earlier stated we believe that a 20% increase to this product category will positively impact Lululemon. The present climate within the marketplace provides better an opportunity than ever for Lululemon to tap into a male consumer.