LULUlemon
08-23-2007, 07:09 AM
#1
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LULUlemon
LULU is probably not a name you are familiar with. It IPO'd on Jul 27 at $18 and doubled pretty quickly. They are in the business of socially conscious high-tech athletic wear, fat pants for the enlightened if you like. I visited a store yesterday with the wife and they seem to be doing rather well. The merchandise is yoga, pilates, dance and fitness wear. It's modern and well styled with the logo designed into most of the stuff. Prices range from $50-$100 on most things and the materials used are cotton, linen, spandex or lycra and some sort of naturally derived micro-fibre such as seaweed, bamboo or wood pulp.
Traffic was proportional to the mall traffic in general. The customers were mainly young women and some men in the 16-25 age range. They offer free yoga classes on Sunday mornings adding to a fitness studio feel of the stores. There was a line-up of people at the cash about 3 deep. The staff were young women and friendly but not pushy mainly working on keeping the merchandising straight and tidy.
There seemed to be a shortage or lack of variety, some items had few sizes available and finding what you wanted in the size and color you wanted proved nearly impossible. I'm not sure if that is due to problems in merchandising or due to stuff flying off the shelves faster than it can be replenished.
The wife really loved the fabrics and said she would definitely return again in the future but didn't buy anything because she couldn't find what she wanted in the color and size she wanted it in. She wasn't put off by the premium price (and my wife is a price conscious shopper who almost never buys anything which isn't on sale) which seems to reflect a perception of value. She said that similar merchandise would cost much more at a Nike store or other premium athletic wear outlet.
Buying LULU right now is a pretty risky bet. Most of their sales come from Canada right now, the capital from the IPO is destined to be used for a huge US and European expansion. If it gains traction in the US market this could be a huge player in an under serviced niche market. Since they just IPO'd there is going to be little or no news until their first quarterly report in October.
I bought 1000 shares ahead of the back to school and holiday season. I think there is are a lot more people who are into fitness for its health and wellness benefits (or perception of) than for athletic sport. Both Nike and UA seem to be focused on the sport market while paying little attention to the health and wellness market. I think the combination of fitness, wellness and health combined with comfort and environmental conscience will strike a chord with their demographic. It's clothing people can wear while vegetating in from of the TV which makes them feel good about themselves. That could be a great combination.
This could be the next CROX or UA stock and I want to be in it from the early going. It also might not be so don't think this is a sure bet. Proceed at your own risk and don't expect an instant payoff. I plan to ride this stock for a few years unless I start to see management drop the ball or their genre go out of fashion. You need to ask yourself: who doesn't want fat pants that make them feel young and healthy? My point exactly.
Traffic was proportional to the mall traffic in general. The customers were mainly young women and some men in the 16-25 age range. They offer free yoga classes on Sunday mornings adding to a fitness studio feel of the stores. There was a line-up of people at the cash about 3 deep. The staff were young women and friendly but not pushy mainly working on keeping the merchandising straight and tidy.
There seemed to be a shortage or lack of variety, some items had few sizes available and finding what you wanted in the size and color you wanted proved nearly impossible. I'm not sure if that is due to problems in merchandising or due to stuff flying off the shelves faster than it can be replenished.
The wife really loved the fabrics and said she would definitely return again in the future but didn't buy anything because she couldn't find what she wanted in the color and size she wanted it in. She wasn't put off by the premium price (and my wife is a price conscious shopper who almost never buys anything which isn't on sale) which seems to reflect a perception of value. She said that similar merchandise would cost much more at a Nike store or other premium athletic wear outlet.
Buying LULU right now is a pretty risky bet. Most of their sales come from Canada right now, the capital from the IPO is destined to be used for a huge US and European expansion. If it gains traction in the US market this could be a huge player in an under serviced niche market. Since they just IPO'd there is going to be little or no news until their first quarterly report in October.
I bought 1000 shares ahead of the back to school and holiday season. I think there is are a lot more people who are into fitness for its health and wellness benefits (or perception of) than for athletic sport. Both Nike and UA seem to be focused on the sport market while paying little attention to the health and wellness market. I think the combination of fitness, wellness and health combined with comfort and environmental conscience will strike a chord with their demographic. It's clothing people can wear while vegetating in from of the TV which makes them feel good about themselves. That could be a great combination.
This could be the next CROX or UA stock and I want to be in it from the early going. It also might not be so don't think this is a sure bet. Proceed at your own risk and don't expect an instant payoff. I plan to ride this stock for a few years unless I start to see management drop the ball or their genre go out of fashion. You need to ask yourself: who doesn't want fat pants that make them feel young and healthy? My point exactly.
08-24-2007, 10:54 AM
#2
I've been in this for a almost a week.. Buying a little as it's gone down. Now at 106 shares with avg price of $34.34 (now priced at 33.46). I have cash allotted to another 44 shares or so.
08-29-2007, 10:56 AM
#3
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I read about this before the IPO happened and then forgot about it, DUH.
I don't know much about the fundamentals, but I do know that 90% of students in yoga/pilates etc classes wear this stuff.... and you get made fun of if you don't, so there ya go.
I don't know much about the fundamentals, but I do know that 90% of students in yoga/pilates etc classes wear this stuff.... and you get made fun of if you don't, so there ya go.
08-29-2007, 07:37 PM
#4
My current basis is $34.01. I think it got up to $33.49 or so today.
I moved some stocks around to make room to buy a little more. Hurts though, after the big jump today. But it's okay, it's still "lowering my cost basis". I'll wait for another little dip.
I moved some stocks around to make room to buy a little more. Hurts though, after the big jump today. But it's okay, it's still "lowering my cost basis". I'll wait for another little dip.
