The firm has downgraded the retailer from “neutral” to “underperform,” citing lasting damage from product quality issues and difficulty attracting new customers, among other issues.
“Many customers have left and it’s hard to get them back, especially given the focus on the women’s active apparel business from brands such as Nike and Under Armour, and retailers such as Athleta, Sweaty Betty, Victoria’s Secret, and others which have bitten into LULU,” Sterne Agee analyst Sam Poser writes.
Here’s why the brand is in trouble, according to Poser.
1. Lululemon has lost customers’ trust. A lot of complaints on the company’s website about the quality of its products are “more indicative of the lack of trust in the Lululemon brand, not quality issues,” Poser writes. Continue reading >>