Former Retailer Says...

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UBS Analyst: Expect Significant Growth in Lululemon 4Q Earnings [view article]
In 1988 I sold a 25 store specialty retail chain for 27 mil. This chain was doing about 27 mil in total revenue, that is an average of just over 1 mil per store, with a gross profit above 50%. How is LULU going to justify the market cap of almost 1.5 Billion? Let's say LULU gets to the point of having 300 stores, and each store does 2 mil. That is total revenue of 600 mil. So, perhaps the company will be worth 600 to 900 mil. That is a far cry from 1.5 Billion!! In addition, other manufactures, like GIII (all you have to do is listen to their last conference call of 3/31/08) are starting to manufacture yoga clothing for woman, which they sell to the major retailers. I also understand that Victoria's Secrets are selling yoga clothing for woman as well. There is nothing special that I can see about LULU, and for sure no barriers of entry. So, why is this stock selling at such a high multiple? In addition, when this company went public, a large percentage of the money went to the selling shareholders, therefore the company did not receive much of the cash.

WHAT AM I MISSING??? Apr 01 05:16 PM

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