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Takeaway: In looking at those who left LULU -- where did they go? Can they win them back? Here's what we learned last time. Update on 3/24.

In looking at those who left LULU -- where did they go? Can they win them back? Here's what we learned last time. Update on 3/24.

Here's the third note in a series of five in advance of our LULU Consumer Survey results on Monday March 24th at 11am ET.  When we polled consumers three months ago, we pulled away some clear insights. The concerns largely outweighed the strengths, which foreshadowed the company's results, and ultimately the stock price.

We're re-running our survey to gauge the incremental change over the past quarter, with the goal of seeing whether LULU is making progress (which could get us more constructive on the name) or not.

In preparation for 'Round 2' we want to offer up some of the notable takeaways from our last survey, as they'll be framing the discussion on Monday.



We asked people who took business away from LULU where they are spending their dollars. This is really a 2-part answer. First off, we ask which stores/brands they're now shopping instead of LULU.  You'll find those results in the first chart. The columns don't add up to 100% because someone could have converted one visit to a LULU store where they bought a full outfit into one visit at each of three different stores.  The big winner is Nike at 34% of visits, followed by VS/Pink, UnderArmour, and Old Navy (which was a lower-income phenomena).

The more important part of the analysis, we think, is in the following chart, which shows the dispersion of items purchased by dollar value. All of the columns add up to 100% -- meaning that it represents the dispersion of where the actual sales went, not just where the people shopped.  Again, Nike came out on top, but a surprise to us was how close UnderArmour came to Nike. The reality is that Nike has been trying to build a women's business for the past two decades, and UA seems to be doing in about 5 yrs what took NKE 20.

The punchline, however, is that there are two companies in all of retail that we wouldn't want to lose share to -- Nike, and UnderArmour. When those two win share, they rarely give it back.





We asked the people who had left LULU -- or taken some of their purchases away for whatever reason -- if they would go back to LULU again in the future. The good news is that about 44% said that they are likely to go back, or (18%) will definitely go back. The bad news is that 10.7% said that they will 'definitely not' return, and 21.4% said that they're 'unlikely' to return to LULU. That's 32% of the people we surveyed who have taken a part of their business elsewhere that LULU is going to have to fight to get back. Out of all the questions in our survey, this is one of the key issues that we'll be looking at to see how things have changed on the margin over the past three months.