Women's activewear market takes off
CHICAGO — In side-by-side dressing rooms, running buddies and best friends Kristin Lewicki and Dara Sparella tried on, modeled and mulled over matching outfits to wear in Sunday's Chicago Marathon — bright pink running bras under "creamsicle pop" — colored stretchy workout tops, heather-gray warm-up hoodies and compression running tights.
More than an hour later, the women, both 33, emerged from Lululemon, a women's sportswear shop, having spent about $400 each.
"You gotta do something, go out in fashion," Lewicki said. Sparella added that, "No matter what size you are, the Lululemon stuff looks good."
In the five years she has been shopping at Lululemon, Lewicki became such a devotee that even though she didn't need to, she took a 16-hour-a-week job in August at one of the retailer's locations. "The whole company spoke to me," Lewicki said.
Apparently there are a lot of women who have no trouble spending nearly $100, and sometimes more, for a pair of workout pants they think will make them look stylish whether they're jogging or running errands. Last year, activewear sales increased 6.7 percent from 2010, compared with women's apparel gains in 2011 of 3.1 percent, according to research firm NPD Group, a market research firm based in Port Washington, N.Y.
Canada's 13-year-old Lululemon Athletica Inc. is the driving force in the segment, operating nearly 200 stores in the U.S. and Canada, with sales last year topping $1 billion, up from $711 million the year before. Retail experts describe its customers as affluent, driven, active and fit, an apt description for Lewicki and Sparella.
Despite their busy lives — Sparella is a manager at a retail store and Lewicki is in nursing school — the Chicago residents spend much of their off-hours running, strength-training and cycling, along with doing some yoga. In December, they'll run another marathon in Honolulu after nearly a month of detoxing with smoothies, juice and veggies.
Their Saturday routine has them up by 4 a.m. for a 14- to 23-mile run, followed by an hourlong fitness class. The women said they like to wind down with veggie juice followed by "girl talk" and green tea at Starbucks. Sparella, who is soon to wed, jokingly said she's so busy that she gave her fiance an invitation to the wedding and told him to show up.
Lululemon's fitness-whisperer mojo is aspirational — brand gurus compare its cultlike following and gangbusters growth to Apple Inc.
Launched in 1998 by Chairman Dennis "Chip" Wilson, Vancouver-based Lululemon shuns billboards and commercials in favor of a more grass-roots approach: free Sunday morning yoga classes, running groups and community billboards in stores. Its sales associates are known as "educators" who aim to know customers by name.
Their fitted workout pants, which start at $82 but go as high as $128 and are known for boosting derrieres, sucking in stomachs and giving the illusion of sleek legs, have made evangelists of customers who proselytize to friends, family and strangers about the apparel's fit and durability. Many customers post photos of themselves wearing the activewear on blogs, Facebook and Twitter.
"They learned the best lesson of all very quickly on: With women, word of mouth is more powerful than any advertising buy," said Marissa Vosper, a senior strategist at New York-based brand consultancy Wolff Olins. Lululemon has succeeded, experts say, because it targeted early-adopter women.
For years, category leaders like Nike Inc. and athletic apparel maker Under Armour focused on specialized materials for function and performance for their sports clothing. Lululemon and rivals like Athleta, a unit of Gap Inc., and Lucy, owned by VF Corp., have enhanced the concept with fashion.
Alameda, Calif.-based Lucy is revamping its brand in hopes of capturing seven kinds of customers, said President Mark Bryden, including superfit "proud peacocks" who have "good guns on their arms," and tend to take the front row at yoga and exercise classes; the "yummy mommy," who exercises her way through her child-rearing years; and the "enthusiast," who despite a busy career makes working out an integral part of her daily routine.
Bryden, who joined the company in January, is rehabbing stores, changing the company's advertising strategy and relaunching its website with the aim of boosting sales 25 to 30 percent over the next three to five years. Lucy, which sells workout pants in the $70 to $100 range, has 57 stores, including six in the Chicago area, and total sales of less than $100 million.
Some upstarts in the segment are even opening shops in Lululemon's shadows, hoping to sop up business. A little over a month ago, Deka, an Atlanta-based high-end activewear retailer, set up shop across from Lululemon at a mall in downtown Chicago.
"Why not be near them or next to them so you increase the chances of them (shoppers) finding your store by chance?" said owner Jim Whitlow.
Deka's "sweet spot," he said, are women in their 60s who have sophisticated taste, travel frequently and shun the dowdy aging-woman look, Whitlow said. Deka customers, he said, are willing to shell out hundreds for fancy activewear designed by luxury apparel makers Stella McCartney and Yohji Yamamoto as well as cashmere sweaters, dresses and stretch pants.
Mass retailers are angling to get in on the action too.
Athleta also has opened an outlet a few blocks from Lululemon on Southport. It sells yoga clothing and "to-fro" dresses at similar price points to Lululemon. Gap also recently relaunched its GapFit line of sports bras and workout pants, which cost about one-third less than Lululemon's.
Target is in the game, too, with its popular C9 by Champion line offering pants priced between $21 and $55.
Now Lululemon is aiming to capture an even younger clientele. Earlier this year the company opened a showroom in Chicago dedicated to Ivivva, its activewear line for girls age 6 to 14. The clothing is priced about 30 percent less than the adult womenswear but uses similar fabrics and styling.