No. 018: guys...Lululemon may be entering its cringe era

plus, pineapple meetcutes, Cult Gaia fragrance, & what 'Founder Mode' gets wrong

🧲 OBSESSION OF THE WEEK

the key to love!!! duh!

There’s a trend on social right now that I think is very indicative of the times.

Started in Spain at supermarket chain Mercadona, single shoppers are, from 7-8pm daily, putting a single pineapple in their shopping carts, face down, to signal that they are single (and ready to mingle).

It’s now moved on to other parts of the world.

I personally love this trend as I think it hits on themes I talk about in this newsletter often — that people want to meet others IRL, but no one wants to make the first move.

I think a brand needs to capitalize on this trend, especially if it can actually make some magic happen in the dating world.

Bumble, you up?

🍿 BRAND NEWS

didn’t realize I needed this til I saw the bottle

• Cult Gaia, a mid-luxury brand known for bold apparel and accessories, is getting into fragrance (a category that’s on fire). Launching tomorrow, their first scent is $225. I loved the founder’s perspective on creating a “brand universe” for customers and associate the brand with a scent — almost like if Fierce by Abercrombie didn’t make us all wanna vom.

• Health Clubs are the new Whole Foods for many indie CPG and wellness brands. Brands like Cadence, Open Water, and Dose are opting for members-only clubs, gyms, hotels, restaurants, and even zoos for distribution — many of which drive significant velocity and, more importantly, buzz.

• The color of the season is brown, and she’s gorgeous. Largely thanks to our 90’s resurgence and obsession with quiet luxury and all things tonal. Now if I could only find the perfect chocolate brown suede bag…

• Loro Piana and New Balance are teaming up for a dad shoe collab, made from Piana’s signature Pecora Nera wool, and they’re only a cool $1500.

• In other shoe news, Supreme x Nike are launching a shoe called the Clogposite. It’s really ugly, and it feels like two brands who are kinda fighting for relevance right now want some PR.

• Capri sun is getting rid of its pouches because apparently nothing is sacred anymore. But really, this is NOT a smart move for a brand that’s only good because it’s fun?!?

• Timeleft is an app that makes it easier to make friends in new cities by matching you with 6 strangers for a dinner date. According to this writer, it was fun. Sounds kind of like a nightmare but also like perfect material for a sitcom?

• Alberton’s, the grocery store chain, is launching a private label brand called Overjoyed. Lol. It’s interesting because we’re seeing more and more retailers spin up private label brands (which helps their already high margins) at a time when DTC is failing and brands have to go omnichannel to survive. I don’t love that.

• After shutting down overnight a few months ago, boutique grocery retailer Foxtrot is apparently back this week. Not sure how their CPG brands feel about this — I’m sure it’ll take some time to mend this relationship…

• Olipop is taking on Big Soda directly to promote new flavor Ridge Rush with new out of home ads with the slogan “A Can of Do” (a direct shot at Mountain Dew).

• After 7 years, J.Crew brought back their physical catalog, featuring coverstar Demi Moore. J.Crew catalogs have become something of collector’s items over the years (they sell on eBay for $50-$250…), so clearly people are very nostalgic for it. As a magazine lover, I respect that we’re in our direct mail era.

🎯 DEEP DIVE: Lululemon needs to get it together before it’s too late

Context

We need to talk about Lululemon. Once the darling of athleisure and beloved by millennial moms and Gen Z it girls alike, it’s having a bit of a rough period, particularly in the US.

Founded in 1998 in Vancouver, Canada by Chip Wilson, the brand is best known for activewear that’s high-quality and long-lasting, with a nod to trends. The brand opened its first storefront in 2000 and now has more than 650 storefronts throughout the United States, China, Canada, Australia, and the United Kingdom.

In 2015, Wilson expressed controversial opinions on who should wear Lululemon leggings: “I think the definition of a brand is that you’re not everything to everybody. You’ve got to be clear that you don’t want certain customers coming in.” He was (rightfully) forced to leave the company. Today, the CEO is Calvin McDonald, a former executive at Sears and Sephora.

The Business

Lululemon’s stock price has declined nearly 40% year over year (at one point this year, it was the worst performer of the S&P 500. Ouch.) Their net revenue in the Americas has declined by 5% year-over-year, which may seem insignificant, but analysts believe is a sign of things to come. Meanwhile, they are up 37% in China, so clearly there is a global market there.

On a recent earnings call, they alluded to some of their missteps in product quality and their solution is the most corporate thing of all time: the Power of Three x2 plan, which is a focus on innovation with a target of doubling its revenue from $6.25 billion in 2021 to $12.5 billion in 2026. 

Curious to see how they fare.

The Wins

It hasn’t been all bad — let’s look into some of the things Lululemon has done well:

patented fabrics: Lululemon is known for fabrics like “Luon” and “Nulux” that only they can do (feel, quality, support in a workout, etc). That has created brand loyalty in a way that many customers feel like its Lulu or bust when it comes to their leggings and sports bras.

viral hits: the Everywhere Belt Bag is literally, everywhere, since 2020. It’s the unofficial bag of hot girl walks everywhere and, at $38, is a pretty low-barrier purchase. It feels like the perfect way to keep the brand top of mind for customers — literally, a walking advertisement. In fact, it’s added $630 million to the company’s topline revenue over the last 2 years — pretty insane.

revamped loyalty program: last month, Lululemon revamped their Membership Program, which currently boasts 22 million members. Expanding on the current offering of receipt-free returns and exclusive community events, they added “Partner Perks,” providing discounts and special access to a curated selection of wellness & lifestyle partner brands, like AG1, Oura, La La Land Café, Life and Time, Barry’s, Sweetgreen, Supergoop and Erewhon.

The Diagnosis

Here’s where I think Lululemon has gone wrong in recent years.

product quality: in July, the brand debuted a new line called Breezethrough, which was supposed to be a breathable new fabric for hot pilates and yoga. Consumer feedback was BRUTAL, as customers noted that that V shaped back seam was unflattering and gave “long butt.” They scrapped the collection just a few weeks later.

increased competition: there are so many activewear options on the market right now. Of course, Alo Yoga is likely stealing a ton of Lululemon’s share (apparently 94% of Alo Stores are within a .5 mile radius of a Lululemon), but there’s also SET Active (a personal favorite), Vuori (who is likely stealing share from Lulu men’s), 437, Gymshark, Adanola, Athleta, Splits59, Girlfriend Collective, Beyond Yoga, and FP Movement, to name a few, not to mention the curated selection at retailers like REVOLVE, Bandier, and Shopbop.

lack of strong brand DNA: one thing about Lululemon is that it’s not clear who the brand is for. It feels a bit like they’re trying to be everything to everyone, and lack that clear focus or vision. I also think their brand colors, logo, and general brand identity feels like it’s stuck in 2001.

reports of racism: this Business of Fashion article from November 2023 details reports from 14 former Lululemon employees stating that the corporate culture is unwelcoming to Black people and that its DEI efforts at the company were cursory at best.

unclear design ethos: the brand is clearly faltering when it comes to product design, exacerbated by the departure of Design Director Sun Choe earlier this year. They aren’t leaning heavily into the fashion-lifestyle aesthetic of Alo but they are also not doubling down on new activewear styles & silohuettes for their core audience. It just feels like not enough is happening.

Olympics flop: Lululemon designed Team Canada’s Olympic uniforms, and many commented that the collection was ugly and looked “blood stained”. Hm, not exactly what you want to hear.

Hot Take 🌶️

Alo’s Wellness House (aka content gold)

Alo Yoga is doing everything Lululemon should be doing, but is way too afraid to do. They are towing the line between fashion & sport, they’re constantly rolling out new product collections, they’re collabing with the hottest celebrities & influencers, and they’re creating a brand universe that expands far beyond their products via events, in-store experiences, and even an Alo Yoga gym.

Meanwhile, we are getting the same stale experience from Lululemon that we’ve been getting since 2010, and frankly, we’ve outgrown it. To me, it’s a classic story of a brand who has failed to listen to customer feedback and to innovate with the times.

Even though Chip Wilson isn’t there, it feels like his stubborn, holier-than-thou attitude is still a part of the brand ethos. In my view, if the brand doesn’t innovate, they will die a slow, painful death — at least in the US.

Free Ideas ☁️

it’s giving… not much

Here are some hot tips for the Lululemon team. I believe that if they make these things happen, they have comeback potential on their hands:

• revamp store experience: Lululemon’s greatest asset is their large number of stores, allowing them to create a strong connection with shoppers that leaves a lasting impression. While they do have local programming like yoga classes and run clubs, we need more. I’ve referenced Reformation’s “Magic” fitting rooms before, and Lululemon could certainly benefit from those. What about offering free InBody scans to help shoppers understand their health profile? That would likely make me want to buy some cute new fitness clothes, stat.

• invest in design: we need to see better design leadership from the brand. We’re continuing to see the same tired styles, colors, and frankly ugly prints, and the product just needs a fresh perspective. Another thing we haven’t seen from Lululemon is a ton of brand collaborations, which is a great way to bring new life into the brand. Imagine an Erewhon x Lululemon collab. Iconic.

• create brand experiences: as mentioned, Alo is killing it on the brand experience front. If Lululemon doesn’t want to get in the gym business, what about wellness centers that are more holistic, offering nutrition plans and meditation courses? It feels like a way to differentiate from the hardcore fitness aesthetic and is ownable whitespace for the brand.

• bring on new leadership: controversy has plagued Lululemon over the past few years, and it seems they need new talent in the building to bring fresh ideas and perspectives. I’d love to see them hire more diverse leaders of all backgrounds, ethnicities, sexual orientations, and even ages.

Thoughts?

🆕 TREND REPORT

Hi, Barbie!

• Barbie is back. I’m not really sure why, but it seems like in the past week, Barbie has been everywhere (again). They just launched a brand campaign in honor of their 65th Anniversary called “Give Limitless Possibilities” and collabs with Krispy Kreme and Stanley Quencher. I know they mean well, but the moment may just be over? Not sure how to feel.

• GenAlpha’s favorite brand is… Youtube?! According to a poll of UK Gen Alphas condcuted by Beano Brain. Other brands on the list include Nintendo, Nike, Oreo, Lego, Sephora, and Crocs.

• Apparently, Miami is not the new Silicon Valley after all. Just two years after opening it, VC firm Andreessen Horowitz is shutting its doors on their Miami office. Time to break out your Patagonias.

🎲 ONE LAST THING

You may have already seen this, but YC cofounder Paul Graham’s “Founder Mode” essay has been making the rounds the last few days.

TLDR; Graham talks about conventional wisdom most founders get: “"hire good people and give them room to do their jobs.” He then goes on to compare Founder Mode vs Manager Mode and implores founders not to “hire professional fakers and let them drive the company into the ground.”

There’s been a lot of debate as to whether Founder Mode is "right” or whether founders should implore their direct reports & their teams to do their jobs.

As a former founder, I believe the best approach is a a combination of Founder Mode & Manager Mode, taking the best from each: trust & accountability. Hiring smart people that you trust are going to do a great job. And more importantly, you’ve got to be crystal clear about what that job is. Have answers to questions like what’s at stake, what are we really trying to solve for, who are we building for, and what are good examples of doing this well?

But ultimately, the buck stops with you. If things aren’t working, it’s not an excuse to blame “the people you hired.” You can never get too comfortable or too out of the weeds. It all matters for as long as you’re a founder.

Comment below and let me know what you think.

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have a great week.

- Sabena