No. of Recommendations: 2
Great video, thanks for sharing.
"Ie that a turnaround will be difficult to engineer and the share price may continue to decline."
I don't disagree that the price is probably going to continue to decline and am in watch mode, but I see a great pathway to rebound. Unfortunately, the company I envision is not the company that exists, so am not pulling the trigger.
LULU has a serious perception problem, which this video confirmed. Telling your buying public they just may not have the body for LULU clothing is insane, but the limited sizes in the stores and anorexic twig models in the ads screams as much. The video talks about the need for less tight fitting clothing, as though yoga pants were all they sold, and indeed until I recently went into a store for stock research, that's exactly what I thought. I was delighted to find beautiful, comfortable running pants that look great anywhere, in a fabulous fabric that you are likely to be able to wash out in your bathroom sink and hang to dry while traveling. (Not yet tested that theory as we rent apartments with laundry units when traveling, but it's on my list to check out.) Their men's department has very nice clothing, even business appropriate, all made with their excellent fabrics. They are missing a huge market by focusing on advertising tight clothing and ignoring the travel wear connection, which larger sized people would flock to. And where is that advertising? While I may have simply tuned out any ads from LULU, I can't recall seeing anything until I became a "member" with my purchase. I am now flooded with email ads of course, all of them touting the skinny models wearing clothing that I have pretty much zero interest in, probably because the too tight clothing even on these sticks don't look at all comfortable. They have invested in the materials, so why not use them on travel wear?
The good news is that the CEO seems to understand they have rested on the yoga pants laurels too long, and that change is needed. Hopefully they didn't wait too long for that and can recover. Perhaps even a new brand launch, specifically for more inclusive clothing would be in order.
I also wonder about waiting too long to pull the trigger. The courts have ruled Trump's tariffs as illegal. Will there be a significant rebound if the Supreme Court backs up the lower courts and tariffs are pulled? I confess I am not rushing to put my cash into this market. We are not in the phase of life where increasing our net worth is the primary goal.
FWIW,
IP
