Lululemon Athletica inc. (NASDAQ:LULU) recently increased the price of a few of its pants, which has left the customers angry. Increase in the price is specifically influential because there are a range of upcoming brands and an increased competition than ever faced by the company. With an increase in competition and emerging brands, Lululemon Athletica will have to work harder to keep its customers happy. Emerging rivals such as Gap’s Athleta, Under Armour and New Balance, the shoe brand, making an entry into the women’s athletic segment is significant right now.
Is Lululemon Athletica inc. offering value better than rivals?
The latest price hike perhaps does not justify the question. However, in order to stay in the league and attract more customers, it has to offer better value. The increase in price may shatter a good amount of customers for the company. Five years or so ago, if a company did something like this, it would not have been risky. However, given the highly volatile markets and great level of competition from the emerging rivals, this move seems to be more suicidal.
Lululemon Athletica already offers the pants that are way too expensive than the competitiors. The present range of its pants is $88-$98 in comparison with Athleta pants‘s price of $31-$89. New Balance is planning, in the meanwhile, to enter stores in the fall. It has its own 72-pages long catalogue. It is offering the items that can be worn not just during workouts, but also during the entire day. The fashion crop pants offered by New Balance are kept at a price of $85, which is again less than Lululemon Athletica. NB is also offering its en-route jacket which is high-collared and is priced at $120.
The company shall be receiving tough competition; especially from the emerging rivals like New Balance. NB is entering the segment with the goal to grab a great slice of the women’s activewear market in the U.S. It represents over $18 billion of yearly sales in the market and is mostly dominated by Lululemon Athletica Inc. (NASDAQ:LULU), Nike and Gap.
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