Seeking Alpha

Are those sweatpants at NY Fashion Week?

  • The success of athletic apparel sellers such as Lululemon (LULU), Under Armour (UA), and Nike (NKE) hasn't gone unnoticed by companies and designers trying to create a splash at New York Fashion Week 2014.
  • Amid models flaunting stylish designs from Vera Wang, Tory Burch, and Jenny Packham - more athletic lines have been spotted. Though called "haute-casual" or "sports-deluxe" styles - the clothes closely resemble sweatpants and leggings.
  • NY Fashion Week in a nutshell: Black jeans out, Wunder Unders in.
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Comments (5)
  • PackerFan77
    , contributor
    Comments (115) | Send Message
     
    "Though called "haute-casual" or "sports-deluxe" styles - the clothes closely resemble sweatpants and leggings."

     

    That is nothing new or inventive. Women in Jersey have been wearing track suits and sweats to restaurants, shopping malls, etc. for probably 25 years already.
    11 Feb 2014, 03:16 PM Reply Like
  • mogram
    , contributor
    Comment (1) | Send Message
     
    CEO of 23andme & Google ex-founder's wife taking meetings in LULU's..that's a woman's version of jeans and a tshirt.
    11 Feb 2014, 04:16 PM Reply Like
  • imac007
    , contributor
    Comments (570) | Send Message
     
    Tech is about design. Design is about form and function. Form is the fashion aspect. Function is the yoga use. Reminds me of fake Rolex's and knockoff handbags. If you don't care if you haven't got the real thing, that's one thing, but if you expect more than "the look", you are being set up to be disappointed.
    The question in this forum is whether it is relevant, to the stock price. I think the press coverage like this is free advertising. They have become the standard for comparison. Even people who knowingly buy knockoffs are buying them based on an underlying desire for the original. It reinforces the disruptive element of the category of athletic wear expanding through innovative technological design. Consumer taste and expectations are drawn into the wake created. Now fashion is trying to follow but only in form. Hollow and superficial offerings will be the result.
    Those who want to provide a similar product to, an expanded audience to appeal to a different body type will need to design for it. Maybe, some kind of stretch canvas to accommodate for someone carrying more weight than the spandex/weave blend was designed for. The point is that function requires research and design not just a nice line when you are posed in front of a mirror. In fairness, that demographic probably aren't after the function part anyway. In that case they are competing in the realm of leggings and sweat pants, with a heftier price tag. In that case they reinforce the value premium placed on Lululemon's offerings. Tons of companies have made runners but Nike prevail. When you look at how small the Lululemon footprint reaches and consider the branding and profile for such an early stage in their growth, it's astounding. Growth has all been organic and it has made them high margin, debt free and with cash approaching $1B.
    I think expectations built into the ongoing guidance given by the company have provided a safety buffer for anyone wanting to buy into earnings. At minimum I would like to see the price move above $50 to $51 signaling a market uptrend, before buying in. Without buyers pushing its value up I would wait another quarter before considering buying. If retail growth remains consistent, the online growth and men's line growth should be a catalyst. If online cannabalizes some store growth, it is not necessarily bad since the online growth is going to be higher margin. Pay attention to margins as a result. A small moderation in same store sales along with solid online growth and a tick up in margin should signal such a state.
    I have owned stock in the past but not at present. I will consider buying going into earnings as expectations are low. I will not likely buy if the price remains below $50. I will watch daily volumes closely though as they are a good barometer. If daily volumes are robust I may enter below $50. I do like the price.
    11 Feb 2014, 05:42 PM Reply Like
  • BudH
    , contributor
    Comments (391) | Send Message
     
    The generic can be just as good. The name brands are able to sell for extra margin, that's their edge. But you have to create and nurture the idea that you are better for having your name brand on there. Extra costs in terms of promotion and presentation are part of the formula.
    12 Feb 2014, 08:30 AM Reply Like
  • imac007
    , contributor
    Comments (570) | Send Message
     
    This goes beyond a name to patents. Calvin Klein and G-III both believe it too. They tried to copy the patented technology incorporated into the design. They ended up settling out of court. Often branding does not equate to value. In that case, you would be true. The fact that failure of their supply chain to deliver that tech according to original specs led to a flawed product, supports the idea, that what you say does not apply here. The branding, in this case, comes out of the quality of the design, generic won't cut it here. Not unlike Apple, the customer experience, dictates the branded view. When it did not they stood behind it. Chip Wilson said it best. When electronic technology is found to be flawed an update is released to solve it. Lululemon had an update but you have to go to the store to get it.
    I don't disagree that knock offs can have margin. The problem is the revenue isn't there. A $10 item needs to sell 10x as well as a $100 item with the same margin to match the revenue. Customer experience determines whether the transaction is ever repeated. Repeat business is the strength of branding based on customer experience.
    12 Feb 2014, 09:55 AM Reply Like
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