Lululemon is launching its first men’s footwear line and casual sneaker as the retailer looks for new avenues of growth in the increasingly crowded athletic apparel space, the company announced Thursday.
The retailer is debuting its first casual sneaker, dubbed “cityverse,” along with two new running shoes that will all come in both men’s and women’s styles for the first time. Cityverse will launch Feb. 13, while the new running models will debut in March and May.
Lululemon’s foray into men’s footwear is part of a larger strategy the company announced in April 2022 to double its men’s business and grow revenue to $12.5 billion by 2026.
“Doubling the men’s business is absolutely a key growth pillar for us, and while footwear is a relatively small category for us and we’re early in our footwear journey, we’re excited by the prospect of just the role it plays in offering him more choice,” Lululemon’s chief brand officer, Nikki Neuburger, told CNBC in an interview.
Still, the launch is just “icing on the cake and a bonus” for Lululemon because the company’s growth strategy “isn’t reliant on footwear,” said Neuburger.
The launch comes as Lululemon grows at a slower rate than it has in the past, and competition from both legacy players like Nike and newer entrants such as On Running heats up. In the three months ended Oct. 29, Lululemon posted a 19% jump in sales, down from a 28% spike in the year-ago quarter.
Most of Wall Street still considers Lululemon a best-in-class retailer, but some firms are expecting its growth to moderate more as the company matures and demand across the sector slows. Last week, HSBC downgraded Lululemon to hold from a previous buy rating, because it expects its strong performance compared with other retailers to narrow as demand slows.
Neuburger said apparel will still be the “juggernaut” and “core” of Lululemon’s overall business. However, its expansion into men’s footwear will give the retailer an edge when competing with the likes of Nike, Adidas, Hoka and On Running, which have all made men’s footwear central to their core offering.
In December, Lululemon CEO Calvin McDonald told analysts on the company’s third-quarter earnings call that its brand awareness among men remains low, at about 13% in the U.S.,12% in Australia and single digits everywhere else outside of North America. He said the figures show it has room to grow in the category.
In order to stand out from the competition, Lululemon aims to set itself apart with innovation and a strong brand name, Neuberger said.
“The innovative approach we take into design and our proprietary technologies … that is not something that other brands are offering across all of their models in their assortment,” said Neuberger.