Analysis of Lululemon's exceptional profitability and why as a business they are very much ahead of its time.
Although Lululemon operates in the same industry as Nike, Adidas and Under Armour, somehow Lululemon’s profit margins is by far the highest amongst its peers. With an average operating income margin of 20% over the last 5 years, it is 8% higher than Nike, 12% higher than Adidas, and an astonishing 20% higher than Under Armour, who struggles with an operating margin of literally 0%. For Lululemon to command such high margins within the cut throat retail apparel industry, it has to be doing something different from the rest of the crowd. While some people may think Lululemon’s success is a result of its higher percentage of female customers since it is often believed that women have a higher propensity to spend on clothing than men, the true drivers behind Lululemon’s extraordinary profitability lie in its innovative business strategies and unique competitive advantages.
Sources & footnotes:
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00:00 What Sets Lululemon Apart From The Crowd
01:01 How Lululemon Creates Value
05:12 How Lululemon Markets Its Value
09:35 How Lululemon Captures Value
15:13 Looking Ahead & Conclusion
21 июл 2024
