“But I also find it strange that with all the popularity, Lululemon does not trademark any of their performance fabrics. A big part of their selling point is the quality of their performance fabrics such as luon, luxtreme, silverescent, etc. In fact, they don’t even have long term contracts with raw material suppliers which is pretty risky as the suppliers can 1. increase the price unexpectedly and in turn increase cost for Lulu, and 2. umm stop supplying under short notice and disrupt Lulu’s inventory flow. As much potential as this company has, they really need a solid senior management team in order to stay afloat with their rapid growth rate. Brand loyalty will fade if they lose quality and reputation.”
An amazing must read post from My Superficial Endeavors analyzing Lululemon stock. Very insightful, especially since she’s an analyst by day.