No. of Recommendations: 1
"Old people" have money and can afford $150 jogging pants. The problems the company had with the see through leggings was met with a CEO who said that some people just shouldn't wear LULU, rather than admit to and address the quality problem. The models they use in advertising, which frankly I only found after buying product during my investigating the brand, are size zeros, and unrelatable. I had no idea that this company made anything other than yoga pants. How is that smart?
If I had to guess their bust customers are probably between 30 and 45 years old and female. You might find the models unrelatable, but the brand is aspirational, so that is sort of by design.
As I said, if there is a concern of alienating current customer base, then you simply develop a companion store of LULULife
Setting up an entire new distribution system with a new brand would cost a fortune, and pose a ton of risk. They need to stay in their lane. I am a shareholder and if they ever move in that direction I would be a seller. My investment thesis is that they can get back to EPS of $15 / share and trade at 15x that amount; which doesn't require anything other than getting back in sync with their current customer base (and figuring out their supply chain to deal with tariffs).
tecmo
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