Lululemon Sets Ambitious Growth Target, Launches Membership Program
Overall, lululemon is aiming to double its 2021 revenue of $6.25 billion to $12.5 billion by 2026 through its new Power of Three ×2 growth strategy. The retailer is banking on growth across product innovation, guest experience and market expansion. Athletic apparel has been a winner of the COVID-19 pandemic as consumers spend more time at home and clothing has become more casual.
In particular, lululemon wants to double its men’s and digital revenues, as well as quadruple its international revenues from 2021 levels.
“The success of our Power of Three formula in delivering on our 2023 growth strategy supports our goal to double the business over the next five years,” Calvin McDonald, lululemon CEO, said in a statement. “We remain early in our growth journey, with our strong product engine, proven ability to create enduring guest relationships, and significant runway in core, existing and new markets.”
The retailer plans to grow its women’s and North America division in the low double-digit compound annual growth rates (CAGR) in revenue over the next five years. Stores are expected to grow in the mid-teens.
The new membership program set to launch later this year seeks a new revenue stream for lululemon, with one free tier and one tier that costs $39 per month, the same price as the subscription to its home fitness platform Mirror. The program offers consumers access to product drops, events and fitness classes. Members in Mirror will be automatically rolled into the new lululemon membership tier, CNBC reported.
The paid subscription tier will feature fitness classes from lululemon partners, including Rumble, Y7, Pure Barre and DogPound, as well as the access and perks in the free membership tier.
Beyond the new membership program, lululemon is planning market expansion in both new and core markets. To meet its international revenue goals, lululemon will engage mainland China, grow its core markets and enter new countries across APAC and Europe. Lululemon will open its first stores in Spain and Italy as part of this plan.
“We are setting bold but realistic 2026 targets from a position of financial strength, while delivering on our 2023 goals with significant growth across our core business,” Meghan Frank, CFO, said in a statement. “We have a long runway ahead and are well-positioned to build on our strong momentum and deliver sustainable long-term value creation for all our stakeholders.”