Chakra capitalism
Lululemon's stretchy-pants success story
Good morning, yogic flyers. This is your Stock Market Rundown for September 6th, 2023. Thanks for tuning in. Let’s get started:
TODAY’S TOP STORY: NAMASTE PAYDAY 🧘
Whether they live in Baltimore or Beijing, women want the same thing from their yoga pants. They should be comfy, they should last through many sweaty sun salutations, and they should make your butt look good.
Lululemon gets this, which is why their rabid fan base of millennial soccer moms has rung up enough purchases to build a stretchy-pants empire.
Athleisure is crowded, with everybody from Alo to Athleta aiming to swathe consumers in Spandex. But Lululemon has defended its market share, and recently raised its full-year guidance on strong international growth. Lulu’s sports bras and belt bags are flying off the shelves in China, where they have over a hundred stores.
The company was founded in Vancouver in 1998 by Chip Wilson, who tried a yoga class for the first time at age 42 and instantly loved it. He realized that the “hippie concept” of yoga was poised to go mainstream. Before long, the brand he founded became the unofficial uniform for vinyasa flow classes.
Today, Lululemon has over 650 stores globally. And the clothes aren’t just for women: men are “obsessed” with Lulu’s tech-fabric trousers. Their hottest-selling menswear item is the “ABC Pant”, which stands for “anti-ball crushing”. A tad crass, but I get it: when you’re identified as a women’s brand, selling to men may require overdosing on machismo.
To be sure, Lululemon has overcome a few corporate blunders. A decade ago, quality flubs led to producing pants that were so “see-through” that your fellow yoga-class attendees might’ve gotten a glimpse of your thong. The CEO responsible was promptly downward-dogged out the door.
SO WHAT ELSE IS GOING ON?
Elon’s sales pitch is working: Tesla’s Model Y was the best selling vehicle in Europe in the first half of 2023. Meanwhile, the second-best-selling vehicle was apparently something called the “Dacia Sandero”. Wild stuff going on over there.
While you’re probably tired of hearing their names, don’t doubt the business savvy of the Kardashians. Kim and Kylie are rumored to be in discussions to buy back ownership of the self-built cosmetics brands they sold a few years ago to Coty—for a fraction of what Coty paid. Who knew a couple of reality show stars could outsmart a roomful of MBAs?
Job openings have declined in recent months, and work-force optimism has waned too: the “quit rate” is at its lowest level since early 2021. (“Quit rate” is the propensity of the average worker to tell their boss to take this job and shove it.)
The Green Giant has relocated to Rio. As of 2023, the US is no longer the world’s largest corn exporter, with Brazil now holding the #1 spot. That’s partly because lots of US corn now gets used domestically for ethanol and added to gasoline. Yes, corncobs are literally fuelling your Camry.
BMW’s China business is outpacing other automakers, and the trend appears set to continue in H2. It’s unclear whether motorists tearing down Chinese superhighways are any better than North American BMW drivers at signaling their lane changes.
That’s it for today, friends; see you bright and early tomorrow. Yours in capitalism, The Axe