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FILE- This June 5, 2017, file photo shows the Lululemon Athletica logo outside a store in Dedham, Mass. Lululemon Athletica Inc. reports earnings Wednesday, Dec. 5, 2018. (AP Photo/Steven Senne, File)
AP Photo/Steven Senne
Ambitious.
BUILT FOR STRETCHING

Lululemon is getting into the sneaker business

By Marc Bain

Women’s yoga pants may be the cornerstone of Lululemon, but they were really just the start. From that foundation the brand has shrewdly expanded into a number of categories, from outerwear to running gear to men’s clothes, which are rapidly approaching $1 billion in sales for the brand.

The next category Lululemon wants to take on is sneakers.

“We tested and we learned a lot on footwear and what we learned is: The [customer] resonates with us selling footwear,” CEO Calvin McDonald said during a presentation for analysts yesterday, according to a report by Bloomberg (paywall). “We believe we’ve identified an opportunity that will be unique to us, and unique within the marketplace.”

Lululemon has been selling sneakers since 2017, but not its own brand. It teamed up with APL, a young label focused on fashionable, high-end performance sneakers that can cost $200 a pair, to sell its shoes in Lululemon stores.

Lululemon isn’t revealing further details about its own footwear plans, but the brand has always focused on premium products that are meant to perform. Even if Lululemon is often associated with the rise of people wearing gym clothes for anything other than a workout—and most people aren’t using their sneakers for anything athletic—it seems likely to stick with the formula of making products actually meant for activity. This focus might also help it stand out from the growing crowd of fledgling labels making more casual sneakers, such as Allbirds and now Everlane.

Creating performance footwear is no easy task. Sneaker manufacturing is generally much more complex than making clothes, and not just any upstart can successfully launch a performance-footwear brand. But Lululemon has a few things going for it. The company already has a background in making technical products, and it has a loyal customer base willing to pay its premium prices (paywall). If its sneakers connect with shoppers the same way its other products have, that business could be a strong engine for long-term growth, as it was for sports brand Under Armour until recently.

And growth is precisely what the company has in mind at the moment. According to data from research firm NPD Group, Lululemon is now second only to Nike in sales of women’s athletic-wear in the US. Yesterday it unveiled a five-year plan that aims to double its sales of men’s products, double its digital sales, and quadruple its international sales. As part of this, it said, its “existing and new product categories are planned to grow, with lines supporting yoga, running and training.”

Sneakers won’t be a guaranteed win for Lululemon when it’s competing against the likes of Nike and Adidas. But according to NPD, small sneaker brands have been growing faster than the big players lately. Lululemon may not be a sneaker giant anytime soon, if ever, but it can still steal away market share, the way it did with its yoga pants.

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