Yoga Sportswear Lululemon Price Fort Whether Loose?

In September of this year, Lululemon (Lulu Le Meng) reported second quarter earnings in fiscal 2019, and its sales increased by 22% over the same period last year, which is 10% more than the seventh consecutive quarter of sales growth in stores. (see "ornate ambition": the Chinese market grew by 68% in the last quarter, and Lululemon increased by 10% over the seven quarter in a row) CEO Calvin McDonald said that the five year growth plan strategy of Lululemon has achieved success, and has made good progress in product innovation, multi-channel experience and market expansion.
Besides product innovation and multi-channel experience, pricing strategy is also considered as one of the important factors for Lululemon to succeed. According to the data of retail platform EDITED, from June 2017 to June 2019, the price of Lululemon tights and sports bra has been relatively stable, the average selling price of tight pants has been maintained at 90 US dollars, and the average selling price of sports bra has been maintained at 47 US dollars.
Data analysis firms GlobalData Retail executive director Neil Saunders also commented that "the stable pricing strategy of Lululemon is one of the important reasons for its success." Lululemon's stable pricing strategy, including full price sales and avoiding big discounts, has helped its profit margins remain 20% up and down over the past five years.
Recently, however, analysts have found that Lululemon's recent participation in promotional activities is increasing, and stable price strategies seem to be changing.
According to the fashion trend WSGN data, about 39% of Lululemon's products were involved in promotional activities in 2018, and since 2019, the proportion of products participating in discount sales activities has increased to nearly 47%, and the average price reduction has increased by two percentage points to 22% over the same period in 2018.
Some analysts believe that in the short term, the profit margin of Lululemon will not be affected too much, but in the long run, the stock price of Lululemon will be affected. Analysts said: "if Lululemon is promoted more and more, then it will lose its high profit margin in the future, and the stock will also be demoted."
In order to improve the passenger flow and reduce the inventory, many retailers often take a big price reduction promotion measures. Although there is some effect in the short term, they will reduce the attractiveness of products to consumers and weaken the brand image in the long run. This is also one of the reasons why many luxury brands do not like to reduce sales promotions. In March this year, Italy luxury group Prada (Prada) announced that it planned to stop the discount sale activities of the stores at the end of the season so as to enhance the profitability of the group and protect the brand image.
However, for the trend of increasing Lululemon price promotions, CEO Calvin McDonald denied in the interview with CNBC. He said: "price concessions and promotions have never been the driving force of Lululemon business growth, and product innovation is the only way. We have been focusing on product innovation and promoting high-end business.
At the same time, an analyst at Bernstein said that the reason why Lululemon changed its discount promotion strategy may be the increase in new products and new products. According to Bernstein data, as of 2019, the Lululemon official website products increased by 130 to 920 yuan over the same period last year.
In April this year, Lululemon also launched a series of beauty and body care, including moisturizing cream, ointment and dry shampoo specially designed for sports people, and announced its formal entry into the beauty care market. Soon after that, Lululemon announced that it would enter the footwear market in a big way.