Lululemon’s incoming CEO has a mountain of problems to fix

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When incoming Lululemon CEO Heidi O’Neill starts her new job on Tuesday, she will have a lot of heavy lifting to do.

Last week, the struggling athleisure brand reported another dismal earnings report, posting a 12% drop in sales in North America and slashing its full-year outlook for the second time in three months. Shares fell roughly 20% on Friday, with the stock hovering at an eight-year low.

Lululemon pinned the slowdown on a decline in products it’s best known for, like leggings, which saw a 20% plunge in sales. Another setback was an incident in which the company mistakenly used a Japanese drum for a promotion in China, sparking backlash and hurting sales.

The disappointing quarter only further underscored the company’s years-long decline due to a litany of problems: customers defecting to trendier rivals, a public fight with founder Chip Wilson that’s been put on ice and a broader pullback in consumer spending .

Where does that leave O’Neill, a former Nike executive, when she enters Lululemon’s headquarters in Vancouver?

Well, in an “unenviable position of leading a company that is in a worse position than when she accepted the job,” said Sky Canaves, a principal analyst at research firm Emarketer.

With sales in North America falling and its momentum overseas stalling, Lululemon has “wider problems with both product and marketing in what is an increasingly competitive activewear space,” she said.

O’Neill has to reposition the brand to appeal to younger shoppers who have shifted their spending to Alo for yoga clothes or FP Movement and Vuori for activewear and continue to dial back discounts.

There’s “no external reason for the numbers to be quite this bad” since the athleisure sector is healthy, according to Neil Saunders, managing director of GlobalData.

“A combination of an incredibly boring assortment, too much non-core product that misses on both fashionability and style, and an absence of good technical innovation have all contributed to a rapid loss of brand heat,” Saunders wrote in a note.

With O’Neill, investors will be “desperately looking for a very clear course correction strategy that puts Lululemon back on stable footing,” he said.

岩村由纪/彭博社/盖蒂图片社

周二，即将上任的 Lululemon 首席执行官 Heidi O'Neill 将走马上任，届时她将面临许多艰巨的任务。

上周，这家苦苦挣扎的运动休闲品牌发布了又一份惨淡的财报，北美销售额下降了12%，并在三个月内第二次下调了全年业绩预期。上周五，该公司股价暴跌约20%，徘徊在八年来的最低点附近。

Lululemon将业绩下滑归咎于其最知名产品的销量下降，例如紧身裤，销量暴跌了20%。另一个挫折是该公司在中国的一次促销活动中误用了日本鼓，引发了强烈反弹，并损害了销售。

令人失望的季度业绩进一步凸显了该公司多年来因一系列问题而导致的下滑：顾客流失到更时尚的竞争对手，与创始人 Chip Wilson 的公开争执被搁置，以及消费者支出普遍下降。

那么，这位前耐克高管奥尼尔进入位于温哥华的 Lululemon 总部时，她的处境会如何呢？

研究公司 Emarketer 的首席分析师 Sky Canaves 表示，她“处境尴尬，领导的公司现在的处境比她接受这份工作时还要糟糕”。

她表示，由于北美地区的销售额下降，海外市场的发展势头也停滞不前，Lululemon 在竞争日益激烈的运动服装领域，其产品和营销方面都面临着“更广泛的问题”。

O'Neill 必须重新定位品牌，以吸引那些已经将消费转向 Alo（瑜伽服）或 FP Movement 和 Vuori（运动服）的年轻消费者，并且还要继续减少折扣。

GlobalData 的总经理 Neil Saunders 表示，“没有外部原因导致这些数字如此糟糕”，因为运动休闲行业发展良好。

桑德斯在一份报告中写道：“极其乏味的产品种类、太多既不时尚也不有风格的非核心产品，以及缺乏良好的技术创新，所有这些因素共同导致了品牌热度的迅速下降。”

他说，有了奥尼尔，投资者们将“迫切希望看到一个非常明确的纠正策略，使 Lululemon 重回正轨”。