Nicole Radzievich / The Morning Call – Reeling from recall of see-through pants, Lululemon to open showroom in the city.
Active women understand the value of a good sports bra, one that can endure a decade of exercise, sweat and machine washings.
Melissa Maioriello Waldron, a 29-year-old volleyball coach from Bethlehem, still has two durable bras she bought in college — one pink and the other turquoise — purchased on clearance at $30 a pop from Lululemon Athletica Inc. in New York City.
“I know $30 each on sale sounds expensive, but they last forever. Ever get one where the elastic stops being so elastic? That can be a problem when running, especially when running. These last forever,” Waldron said.
And the bright colors, she added, were a bonus.
It’s the type of experience that Lululemon, the Canadian company that revolutionized women’s athletic apparel, is looking to re-create as it continues to limp past an embarrassing recall of see-through yoga pants last year and fight more competitors in the market for closet space.
The premium, yoga-inspired clothier announced last week it is positioning itself for “sustainable and controlled” expansion as the upward trend in athletic-wear sales increases. This month, company officials say, Lululemon will stretch into the Lehigh Valley market with a showroom in downtown Bethlehem.
The company is looking to people like Waldron to spread the word about the nondescript storefront at 36 W. Broad St., two blocks from the bustling intersection at Main Street.
Instead of filling a large retail space, showrooms stock the core products like the popular Wunder Under pants or the fanny-flattering Groove pants made with “Full-On Luon” fabric — both with price tags at $100 or more. More seasonal wear likely will not be stocked.
The idea behind Lululemon showrooms is to rally loyal customers who shop at the company’s urban stores or online, and to introduce the brand to new customers who crave the tactile experience of feeling fabric before deciding whether to buy.
Showrooms rely on word of mouth — devotees telling their friends and creating a buzz. Showrooms also offer free programs, such as yoga demonstrations, to get potential clients into the store.
But the 2,000-square-foot storefront may not be a permanent spot, even if the retailer decides to stay in the Valley. It’s just an introduction.
“The showroom is a great test for us to determine whether to have a permanent presence in a community,” Lululemon spokeswoman Jill Winter said.
Lululemon has about 52 showrooms and 254 stores across the country. The closest full-service stores are in Philadelphia, which is home to five, and King of Prussia.
The entrance into the Lehigh Valley market comes during an upward trend in athletic-apparel sales. Last year, NPD Group Inc., a global information company that studies retail trends, reported that apparel sales remained somewhat steady at 1 percent for the first eight months. But activewear grew by 7 percent.
Women spent $7 billion, up 5 percent, in athletic apparel during that period. The top-selling items were active pants, athletic tops and sweatshirts, according to NPD.
The twist is that these specialty shops aren’t just selling clothing; they’re selling a lifestyle. Websites and catalogs show women running along beaches, hiking canyons and twisting into a “camel” pose on yoga mats cushioning blonde hardwood.
The clothing is marketed as much for its fashion appeal as its durability — a niche that Lululemon forged. Consider yoga pants the new black jeans.
“One of the things you’re seeing in women’s apparel is the increasing importance of health and wellness in women’s lifestyles,” said Ray Gottschalk, executive vice president at Tris3Ct, an advertising agency that specializes in retail marketing. “It’s created a more significant [demand] for what was a niche segment. What you are seeing is athletic apparel worn to places beyond the gym.”
Jeff Green, president of the Phoenix retail consultant agency Jeff Green Partners, said the Lehigh Valley is a large secondary market that can support higher-end brands, pointing to the recent success Williams Sonoma and Pottery Barn have had at the Lehigh Valley Mall.
Segments of the Lehigh Valley, he said, include the type of women who would shop at Lululemon.
“It’s a seen and be seen product,” Green said. “To wear it is almost a status symbol, similar to wearing a designer dress.”
His concern is the showroom’s location: How do you get the affluent, outdoorsy woman from, say, west Allentown to a small storefront squeezed between Hello Burrito and Edible Arrangements?
But like or not, this is the test Lululemon has relied on throughout Canada and, more recently, in Boise, Idaho, where the success of a downtown showroom led to a permanent store at a nearby lifestyle center mall, Green said.
Lucy Lennon of Boutique at One Properties, which lured Lululemon downtown, said it was a tough sell, but argued the local merchants can offer the store its marketing template: building loyalty through grass roots rather than advertising. The stores downtown will refer customers to other stores, even stock some of one another’s products, noting that Aardvark sports shop is just down the street.
Stacey Redfield, a Bethlehem pilates instructor who used to sell limited Lululemon items in her studio, said the company’s model appears to be not to flood the market so it can keep the price points high.
She said the conventional wisdom in marketing is that women will buy three shirts for every pair of pants. To get women to buy a $100 pair of pants, a company has to convince the patrons that the pants will last — it’s an investment. That’s the image that Lululemon projects and why the recall was, at least temporarily, particularly damaging, she said.
Redfield said Athleta, a Gap company, does a great job mimicking the style of Lululemon and selling clothing a tad cheaper.
Athleta, which began as an online store in 1997, has been opening brick-and-mortar shops around the country and last year opened one in Center Valley at the Promenade Shops at Saucon Valley.
Other department stores, from Kohl’s to Macy’s, have grown their floor space with women’s athletic apparel while other specialty stores are offering active wear, like Gap’s 2010 introduction of the BodyFit line. In January, Under Armour stepped up its game by signing ballerina Misty Copeland, noted for her athleticism in a highly artistic discipline, for its largest marketing campaign targeting women.
Meanwhile, Lululemon is executing a new game plan following the recall of its sheer pants, which cost the company $67 million. Founder Chip Wilson stepped down last year as chairman after suggesting some customers’ body types and “rubbing through the thighs” were partially to blame for the company’s problem with the see-through pants.
The backlash from Lululemon customers was immediate, forcing an apology from Wilson and his eventual ouster.
Laurent Potdevin, Lululemon’s new chief executive, issued a statement in March following the report on its fourth-quarter earnings, saying company officials this year will reflect on “our learnings with humility and are entirely focused on our future.”
Potdevin described 2014 as “an investment year with an emphasis on strengthening our foundation, reigniting our product engine, and accelerating sustainable and controlled global expansion. The emotional connection that Lululemon creates is at the heart of what we stand for, and we are being relentless in our commitment.”
It’s unclear what all this spells for Lululemon. Its fourth quarter showed flat profits and a 2 percent decrease in store sales. But direct consumer revenue — online — rose by 25 percent in the fourth quarter.
The report led to a modest fourth-quarter earnings of 75 cents a share, barely above the company’s expectations. But by March 27, the day the fourth-quarter earnings were announced, the company’s stock jumped to $52.70 a share, recovering from a $44.32 low last year but still well below its $82.50 high. It closed Friday at $54.20.
To people like Waldron, though, Lululemon’s real success can’t be measured in quarters or even the year-end financials.
It’s measured by belief that the pair of yoga pants she bought a couple years ago will outlast the see-through backlash.
