Question+1

Lulu lemon Athletica Inc. and Victoria's Secret, owned and run by the Limited Brands, are attracting shoppers with quality, fashionable merchandise that cannot be found offered elsewhere. Customers are looking for value and quality, and are willing to make investments in products that offer them both. According to lulu-lemons manifesto1 their primary target customer is a sophisticated and educated woman who understands the importance of an active, healthy lifestyle and who believes in pursuing exercise to achieve physical fitness and inner peace. Victoria’s Secret on the other hand is the leading specialty retailer of women’s intimate apparel, fashion-inspired collections, prestige fragrances and cosmetics. Lulu-lemon and Victoria’s Secret primarily appeal to customers in the upper-income bracket whose spending power is less affected by economic downturns.
 * Introduction.**


 * PART 1 - MARKET ANALYSIS**

It should be**: Dollar volume**, **total value in dollars** of the goods or services produced by an industry. We did this in economics class. We can find it at the library website. Or we can go to economics prof and ask him for help. Abdul said there is some website where we can find actual sizes of various industries. Maybe we can just cite those numbers. It will also save us some space.
 * Assessment of the size of the industry.**

Maybe this would be good but im not sure. http://www.bizstats.com/reports/ind-corp-sales.php
 * ~ 2008 Corporation Receipts
 * Industry** ||~ **All Returns** ||~ **Gross Receipts (000)** ||~ **Net income (000)** ||~ **% Returns** ||~ **% Receipts** ||

Think we should calculate it when we find sales of our industry for every year and then analyze. I found data for clothing industry and calculated growth rate but it may be too general. Ill send it by email to all of you. We should also mention here age of the industry and PROJECTIONS FOR THE FUTURE. Victoria’s Secret has grown into a giant of the lingerie apparel business since it was bought by Limited Brands. In the past, intimate apparel hardly generated any interest in the business community, but looking at recent trends in women’s apparel, intimate apparel has grown faster than any other and Victoria’s secret is credited as being the major player behind this growth. The core of Victoria’s Secret is bras and panties. VS sees clear opportunities2 for substantial growth in these categories by focusing on product newness and innovation and expanding into under-penetrated market and price segments. Lululemon is the only clothing manufacturer dedicated to yoga and fitness apparel which gives it a powerful position in the apparel market. Their yoga-inspired apparel is aimed to offer performance, fit and comfort with combining both function and style.
 * Clothing and clothing accessories store || 50,174 || 183,701,991 || 4,251,032 || 0.86% || 0.74% ||
 * Analysis of market growth.**

Lululemons projection for future growth include growing their store base in North America by primarily focusing on growing the number of stores in United States and to add more stores in Canada to strengthen existing markets and to cater to newer markets. They plan to increase their brand awareness which will result in increased sales and productivity. Other growth strategies that lulu lemon is pursuing is to broaden the appeal for their products by growing their men’s business, by expanding product categories, by increasing the range of athletic activities their products target and by expanding beyond North America. Limited Brands plans to downsize by shutting down under performing Victoria’s Secret stores and by remodeling and expanding performing stores. It also plans to increase its overseas company-owned and franchised store count. The growth plans11 includes opening two company-owned locations in the U.K. earlier in 2012 and its first full-assortment Victoria’s Secret franchised stores in the Middle East later in the same year.

The sale of women’s intimate and other apparel, through retail stores is very competitive with many competitors such as specialty stores, department stores and discount retailers. The main competitors3 of VS are Fruit of the loom, Frederick’s of Hollywood, and department stores that sell intimate apparel from a number of major manufacturers, including Sara Lee, Maidenform and Warnaco. Frederick’s of Hollywood markets it lingerie apparel as more racy and with explicit images which created a perception in the customers mind that they offer products for special occasions rather than everyday wear which as a result prevented the brand from really taking off and becoming more mainstream. Sara Lee heavily publicized its introduction of the WonderBra a decade ago, creating a sharp increase in demand for push-up bras. Victoria’s Secret replied by marketing their own cleavage-enhancing bras to attract the demand that Sara Lee could not meet fast enough.
 * Competition**

Lululemon has competition4 on the smaller scale as well as on the larger scale. On the smaller scale lulu lemon competes with retail shops located in gyms and fitness centers and retailers such as Dick's Sporting Goods which sell fitness apparel. On the larger scale it competes with industry giants such as Nike Inc and Adidas AG, which includes adidas, reebok and under armour, manufacturers of athletic apparel and accessories. What sets Lululemon apart from its competitors is their sole focus and dedication towards manufacturing and promoting yoga and fitness apparel where as its competitors produce all kinds of sporting apparel, equipment and footwear for markets to which lulu lemon does not cater which puts it in a powerful position as a niche player in the apparel retail market.

These two brands cater to customers usually in the higher income bracket who are usually least effected by economic downturns. Though purchase of expensive women intimate lingerie and apparel would not make it to an average earners purchase list during declining economic and market conditions, customers loyal to these brands usually have the wealth5 that allows them to continue purchasing trendy and pricey apparel despite downward trends in the economy. During such downturns the companies may increase the number of promotional sales, which would attract even those customers who are not willing to pay the higher prices, to cover their operational and financial expenses. Another effect during the downturn in an economy is the inability of key suppliers to access liquidity6, or the insolvency of key suppliers, could lead to delivery delays or failures.
 * Effect of environmental factors on the industry.**
 * Economic Factors.**

As the number of women, the main target market of the two brands, increase in the workforce they are more than likely to make independent buying decisions. For eg: in Canada, according to stats-can12 the number of working women has increased over the past decade - with a marked rise in mothers with young children returning to their jobs, 74.7% of women with a university degree, 59.1% of those with some postsecondary training are employed and despite the increase in unemployment in 2009 during the recession, women were affected less than men n the labor market which shows that women's spending power is less affected during downturns and that they can continue with their buying patterns.

VS uses technology to enhance its management information systems7 which consist of a full range of retail, financial and merchandising systems. The systems include applications related to point-of-sale, e-commerce, merchandising, planning, sourcing, logistics, inventory management and support systems including human resources and finance. They continue to invest in technology to upgrade core systems to continue to improve their efficiency and accuracy in the production and delivery of merchandise to their stores. Lululemon according to their annual report8 is focused on using technology for developing and offering products that incorporate technology-enhanced fabrics and performance features. Teaming up with leading fabric producers, lululemon has developed and trademarked names for innovative fabrics such as luon, silver scent, natural stretch fabrics using organic elements such as bamboo, soy, seaweed and are currently working on producing fabrics to provide advanced features such as UV protection and temperature control.
 * Technology.**

There are several social factors which have a big impact on the industry. In this media intensive society everyone is exposed to images of unnaturally attractive people and comparing ourselves to the norms set by brands which specially lead women to base their self-worth more strongly on their appearance. Victoria's Secret adresses this phenomenon by promissing self connfidance and fasionable, seductive look. Healthy life style and increasing amount of people doing sports creates growing market for Lululemons products.
 * Social Factors.**

Social and Cultural Norms have a big impact on how women perceive their appearance. . It is clear that exposure to societal messages9 that reflect the sociocultural norm for ideal appearance has a negative effect on women. What these brands other than their popularity have also achieved is the fact that women measure their self-worth by their appearance, accounting10 for their widespread body dissatisfaction and self-consciousness. This claim is also backed by the recent decision taken by lululemon to phase out size 14 women’s clothing from their shops which can been only seen as an associating thinness with beauty. Many people have termed this step by lululemon as discrimination and double standard on the company’s part because they still continue to sell sizes up to XL for men. This has only resulted in alienating and discouraging plus sized women which will result in poor self-esteem.

2. [] 3. [] 4. [] 5. [|http://www.wikinvest.com/stock/Lululemon_(LULU)] 6. [] 7. [] 8. [] 9. [] 10. http://psp.sagepub.com/content/34/2/288.full.pdf+html [|11: http://www.marketwatch.com/story/limited-brands-defends-its-international-plan-2011-10-19] 12 http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=89-503-X201000111387&lang=eng
 * 1) [|www.lululemon.com/about/manifesto]

1) athletica, 2. l. (2011). the lululemon manifesto. Retrieved 10 15, 2011, from lululemon: @http://www.lululemon.com/about/manifesto

2) Bull, P. S. (2008, 2). Victoria's Dirty Secret: How Sociocultural Norms Influence Adolescent Girls and Women. Retrieved 11 1, 2011, from Sage Journals Online: @http://psp.sagepub.com/content/34/2/288.full.pdf+htm

3) Chelsea Chi Chang, A. L. (2004, 5 2004). The Silky Strategy of Victoria’s Secret. Retrieved 10 25, 2011, from None:http://www.mcafee.cc/Classes/BEM106/Papers/2004/Victoria.pdf

4) Cheng, A. (2011, 10 19). Limited Brands defends its international plan. Retrieved 10 25, 2011, from Market Watch:@http://www.marketwatch.com/story/limited-brands-defends-its-international-plan-2011-10-19

5) COMMISSION, U. S. (2011, 3 17). Annual Reports. Retrieved 10 27, 2011, from Lululemon: @http://investor.lululemon.com/secfiling.cfm?filingID=950123-11-26220

6) Dartmouth, T. S. (Unknown). Glassmeyer/McNamee Centre for Digital Strategies. Retrieved 10 21, 2011, from MBA Tuck Darthmouth:@http://mba.tuck.dartmouth.edu/pdf/2002-6-0014.pdf

7) Ferrao, V. (2010). Paid Work. Retrieved 10 25, 2011, from Statistics Canada: @http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=89-503-X201000111387&lang=eng Limited Brands. (2011, 1 1). Limited Brands. Retrieved 10 27, 2011, from Victoria Seceret 2010 Annual Report:@https://materials.proxyvote.com/Approved/532716/20110328/CMBO_86861/images/Limited_Brands-2011.pdf

9) Wikinvest. (2010). Lululemon. Retrieved 11 3, 2010, from Wikinvest:@http://www.wikinvest.com/stock/Lululemon