Seeking Alpha

Lululemon and Abercrombie & Fitch: Maybe it was something you said

  • Both Lululemon (LULU +0.4%) and Abercrombia & Fitch (ANF -2.1%) stand accused by retail analysts of alienating its customers after execs made ill-timed digs at the plus-sized customers the retailers haven't included in their marketing or sales plans.
  • As Lululemon and A&F continue to suffer from negative feedback for their strategies - sales have been strong at Hot Topic (HOTT), Ascena Retail Group (ASNA), and L Brands (LTD) for brands which cater to plus-sized shoppers.
  • Tale of the tape (YTD returns): Lululemon -13% and Abercrombie & Fitch -28% vs. Hot Topic +45%, Ascena Retail Group +15%, and L Brands +37%.
Comments (3)
  • SanDiegoNonSurfer
    , contributor
    Comments (2575) | Send Message
     
    Women are realizing they don't do themselves any favors (literally in this case) buying into someone else's idea of what their body shape should be
    15 Nov 2013, 02:08 PM Reply Like
  • ystock15
    , contributor
    Comments (169) | Send Message
     
    Exactly, for YTD return of the other three are so high now, you must not invest in them. Only idiots invest to those companies whose YTD are already so spiked up. Buffet only buys undervalued and healthy company just like ANF. After ANF's remarks about fatso subside, the stock price will go again up $50 range

     

    ANF is awesome pick at this price. I had my eyes laid on for sometime and bought it today and already making some now
    15 Nov 2013, 04:41 PM Reply Like
  • imac007
    , contributor
    Comments (441) | Send Message
     
    Lululemon are a technology and design company. The R&D justification for the technology and design required to provide a 125 pound yoga student with a durable reliable wardrobe is completely different than a potential customer weighing twice that amount. Design might dictate canvas vs spandex to avoid a see through issue.

     

    Reality says that the actual numbers of potential customers in that demographic may not justify the development costs. Nike probably don't spend gobs of R&D on size 10 shoes for 300 pounders that dunk a basketball.

     

    I can bring together good quality materials to build a chair. But, design can make all the difference. Inferior design can literally be a pain in the a**. When the supply and assembly chain failed to execute on the tech design front the result was substandard.

     

    Design is about form and function. I suspect that form might be there on a Gap designed "yoga" labeled pant for a size 20 but lack the function. In fairness, the size 20 patron is likely only interested in the look rather than the functionality. In Lululemon's defense, they produce garments meant for both form and function and target the profitable demographic that need both benefits. Use outside the form and function of the design has consequences. A 300 pounder rolling his ankles and walking on the sides of his sneakers shouldn't expect good wear characteristics. The wear and tear of sitting on concrete steps outside the school library hardly constitute normal yoga wear design use.

     

    Lululemon are simply defending their garment quality and customer satisfaction. When quality has been compromised they have offered replacements and refunds. When use falls outside form and function they have defended the design. I think they are justified.
    15 Nov 2013, 04:41 PM Reply Like
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