People may be venturing outdoors, but Lululemon remains extremely bullish about its acquisition of at-home fitness platform MIRROR.
In addition to expanding MIRROR’s capabilities, the apparel brand and retailer is growing its omnichannel investments, with plans to open 40 to 50 new mainline locations globally. It will also build on its curbside pickup, virtual waitlist and appointment shopping, and pilot same-day delivery from stores in nine markets.
“We have a number of guests that only shop our stores, and we are focused on reengaging with them at the frequency they shopped with us before COVID-19,” said Calvin McDonald, Lululemon CEO. “In addition, we have a significant number of new guests who engaged with us for the first time online last year.”
While its fourth quarter was impacted by more COVID-19-related store closures and capacity constraints than originally anticipated, the company grew total net revenue 24%, to $1.7 billion. This included a 21% increase in North America and a 47% increase in its international business.
Its digital channel recorded a 92% comp increase for the quarter, driven by growth in both traffic and conversions, with e-commerce contributing about 52% of total revenue.
As a result, Lululemon achieved its goal of doubling 2018 e-commerce revenue three years early.
Looking ahead, key growth strategies including introducing more category and franchise shops, investing in product details page, and enhancing its content and creative. It’s also upgrading search, browse, checkout, personalization and payment methods.
Capital expenditures are expected to be $335-$345 million for the year, accounting for investments made in supply chain, digital capabilities, new store openings and renovations, and other technology and general corporate infrastructure projects.
MIRROR of Love
MIRROR, which Lululemon acquired in 2020, generated approximately $170 million in revenue in 2020, including the period prior to its acquisition.
And despite consumers venturing more outdoors, the company noted that consumers were already seeking more convenient at-home fitness exercise prior to the pandemic, a trend it expects to continue. The company forecast MIRROR revenue to increase 50-65% to $250-$275 million in 2021.
As a result, Lululemon is expanding the number of live classes that are offered, as well as adding two production studios by the end of the year. (It currently has just one.) As the average MIRROR member takes more than six different types of workouts each month, the company is also adding up to seven more instructors.
To boost visibility of the fitness device, the company is also growing its shop-in-shop strategy for MIRROR to more than 200 locations in North America this year.