How Lululemon is sprinting ahead in the UK sportswear market

Lululemon has sometimes been embroiled in controversy in the past for not being inclusive after ex-boss Chip Wilson made controversial remarks about targeting a specific upper-class demographic and choosing the name for the brand.

However, the retailer has come a long way since and has been on a journey of growth that has surpassed the sales boom of the pandemic, even while other businesses that grew rapidly during lockdowns have since suffered declines.

Lululemon is the seventh fastest-growing retailer and the 20th biggest international retailer in the UK. How has the activewear brand stretched to new heights and how does it compare to other sportswear rivals?

Quality and adaptability 

As global lockdowns boosted demand for sportswear and equipment, brands such as Lululemon, Under Armour and Gymshark reached sky-high levels of popularity. 

Lululemon has been successful in carrying that momentum forward.  

In the year ending January 31, 2024, Lululemon reported a 19% increase in net sales to $9.6bn (£7.64bn) – up from the $8.1bn (£6.6bn) reported during the previous comparable period. 

Sales in North America increased 12%. In mainland China and the rest of Lululemon’s international markets, growth was 67% and 45% respectively. 

Alice Price, associate apparel analyst at GlobalData, says Lululemon’s success is driven by a shift in consumer attitudes toward premium sportswear. 

She says: “Premium sportswear as a whole has been doing very well in recent years, with the likes of Lululemon continuing to report outstanding results while new players such as Alo Yoga, Vuori and Varley have been growing brand awareness and expanding internationally. 

“This comes as shoppers are willing to pay higher prices for items that are perceived to be better quality and more durable, especially as staples such as leggings and sports bras are worn more frequently than regular fashion items and endure more wash cycles. Premium sportswear products are also more likely to be trusted by consumers to have superior technical features and better functionality.”

While competitors such as Under Armour have reported falls in sales, Lululemon stands out because it also offers consumers clothing that can be worn outside the gym.

Price says: “Athleisure remains a significant driver within the sportswear market, as consumers continue to prioritise clothing that delivers comfort and versatility to accommodate a range of day-to-day activities with Lululemon remaining the largest athleisure brand.” 

Lululemon has played a long game. The retailer’s ‘Power of Three x2’ strategy has set ambitions to double its men’s business, double digital business and quadruple its international business – to ultimately double sales from 2021 to $12.5bn (£9.95bn) by 2026.

The UK growth story

As part of its growth plan, Lululemon has been ramping up investment in international markets including the UK by opening new doors for the business as well as ecommerce growth.

The UK contributed £89m to the Canadian retailer’s total sales of £6.6bn in the year ending January 31, 2023, making it the 20th biggest international retailer in the UK. This is 46% higher than £60m in UK sales reported by the brand for the previous year.

Profit after tax from UK operations improved 40% during the same period to £3.2m, up from £2.2m.

The brand has 19 stores in the UK and has been growing in the last few years, says Beth Bloomfield, senior retail analyst at Lumina Intelligence 

She says: “Lululemon is quietly growing in the UK. It opened two new standalone stores in Brighton and Battersea Power Station in 2023 as well as a shop-in-shop in Fenwick Newcastle. It plans to relocate and upsize its Covent Garden store in London in the summer of 2024 as it ramps up UK investment.”

Lululemon’s new flagship unit at The Yards, Covent Garden, will cover 8,364 sq ft, a 130% increase on the brand’s previous store, and will feature a range of activewear products for activities including yoga, running, training and more across its womenswear, menswear, footwear and accessories lines.

The retailer also has a keen focus on ecommerce and Retail Week’s Top 30 UK Ecommerce Retailers report revealed it to be the sixth fastest-growing brand in terms of online sales in the UK.

Lululemon reported online sales of £35m in the UK in the full year 2023, up 20.3% from the previous year. The brand is forecast to reach £40m in ecommerce sales in full-year 2024 with a five-year compound annual growth rate of 13.9%.

While Lululemon pushes ahead in the UK market, its main competitor is the relatively new kid on the block Gymshark. The UK brand and comparatively mass-market retailer was only three places below Lululemon to be the 10th fastest-growing brand in the UK.

While Gymshark’s success is majorly driven by its focus on community and trust within the fitness community, Price says Lululemon also offers a tough fight in the area.

She says: “Like Gymshark, Lululemon has also focused on community building to grow the brand. Many of its stores offer free weekly yoga classes, host run clubs, and include cafes selling nutritional food and beverages, promoting a healthy lifestyle that increasingly resonates with consumers.”

Lululemon is running a marathon, not a sprint, as it continues to execute its strategy to convert short-term wins into long-term growth.