Lululemon Looks to Haiti to Improve Supply Chain Speed to Market

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Lululemon Athletica

Lululemon is working harder on what’s working best and looking to new markets to get yogawear to consumers quicker.

In an earnings call on Thursday, Lululemon CEO Laurent Potdevin said, “We are designing to a future of how people want to live their lives and connect with each other.”

That sentiment was evidenced in the brand’s new store experiences, including a mindfulness space in its new 5th Avenue store in New York City, and the company has even held live-streamed yoga sessions for markets in Asia where growth has been big as the region gains interest in wellness.

For the second quarter ended July 30, 2017, net revenue at the company increased 13 percent to $581.1 million. Total comparable sales were up 7 percent. Revenue in its direct to consumer segment increased 29 percent, and gross profits saw a 17 percent jump to $297.4 million.

Potdevin said brand momentum has been strong, as have store openings—which amounted to 42 net new openings since Q2 2016, across the U.S., Asia, Canada, Europe and Australia and New Zealand. Growth across Asia was particularly notable, with 70 percent year-over-year market growth in the region, led largely by China. The company plans to open 12 new stores in Asia before the year’s up, six of which will be in China.

What’s new with Lulu’s supply chain?

As with many apparel brands, Lululemon is looking more closely at its supply chain and studying how to make it work for the demands of today’s market.

“We currently have efforts underway that will allow us to dramatically improve our speed and flexibility in how we bring product to market,” company COO and CFO Stuart Haselden said on the call. “We are accomplishing this in several ways, including the development of a segmented supply chain to unlock efficiencies, staging fabric to better position us to chase demand, and implementing new speed models for our core and seasonal styles.”

The company is also working to enhance its inventory allocation systems to improve how it flows product in order to better anticipate consumer demand.

Beyond those efforts, Lululemon is looking to Haiti to source some of its product in order to get it to market more quickly.

“One of our key strategic sourcing partners is pursuing production facilities in Haiti,” Haselden said. “This would not only help us reduce lead times on product we source with them, but we would also realize freight and duty benefits as well.”

Riding the wave of designing to how people want to live their lives, Lululemon will launch an update to its website in the third quarter, which Haselden said will deliver sight enhancements just in time for holiday shopping.

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