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Takeaway: How consumers feel about mgmt has a considerable impact on LULU. Here’s the detail on what percent care, and whether they’ll come back.

This week we explored LULU's a) customer purchase cadence, b) customer loyalty, c) competition, d) reasons for leaving the brand -- and several others.  As a reminder, we'll be looking at the incremental change in these areas as well as the following factors when we host our call on Monday 3/24 at 11am ET.

  1. Does LULU need to begin a more aggressive discounting strategy?
  2. New brands are encroaching on LULU's turf, is that rate slowing or accelerating?
  3. What is LULU's perceived price/value equation relative to other brandsand how is that changing?
  4. Growth in points of distribution for Yoga product - a key competitive threat for LULU.
  5. Insight into our store overlap analysis between Athleta and Lululemon
  6. UnderArmour scored so close to Nike in our last survey - which was a big surprise. Nike has been fighting back. Is it working?
  7. Is the 'I hate LULU Management!' factor (present in 58% of people responding last time) - still as severe? Any improvement? 

To cap off just a few of the highlights of our last survey, here are a few charts showing factors related to corporate management.  We showed this chart yesterday, but it's an important reminder that one of the most notable factors that drove people from the brand was that they dislike corporate management.


Separately, we asked people whether they are aware of the comments that Lululemon senior management made in public in November.  To be clear, we did not state who the person was, and we certainly did not say what the comments were. We did not want to lead the witness.  If we asked Wall Street about these comments, we'd get about 98% of people who heard of them. But The Lululemon customers we surveyed came in at 58%. We can all read that a different way, but our view is that this is a HUGE percentage for your everyday follower of the brand.

Then we asked that 58% if those comments impact the Lululemon brand, and 67% said Yes. We're hoping -- for LULU's sake -- that this number comes down dramatically when we crunch through our results over the next couple of days.

Lastly, we asked how these comments will impact shopper behavior.  10% of the people said that they'll never shop at Lululemon again…which is tough to overcome, 38% said that they'll spend less, and 16% indicated that they simply don't care and will likely spend more. About 36% seem neither positive or negative.

It's good that there's a big proportion of customers that are unaffected, but having 48% that are on the net negative side as it relates to spending intent is not what we want to see from a growth brand.  The update here should be interesting.