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Takeaway: Chip opines on LULU - company needs a change of address. Amazon officially launches 'Handmade' vs ETSY.

LULU - Chip Speaks on LULU


This was probably the least controversial  and most candid public comment Chip has made in over 3 years.  His comments on former CEO Day, apology for fat shaming his customers on Bloomberg, and thoughts on the present state of the company  don't surprise us in the least. He wouldn't have stepped down from the Board in February or announced that he was selling the rest of his stake in LULU if he felt otherwise.

As far as his comments on UA are concerned. Yes, UA has a market cap 3x LULU today and three years ago UA was in LULU's rearview. But, that is the inherent problem with both Chip's vision for the company (he wanted to switch the brand identity from yoga to 'mindfulness') and it's current distribution/brand segmentation. To even compare the two, LULU would need to double down on its ability to flow product more accurately throughout a multi-channel distribution platform, while maintaining price integrity, and its premium brand status

Separating the lululemon brand from its Founder was a win for the board, there is still a lot of wood to chop in Vancouver. We think LULU needs a change of address (not literally). This is an extremely powerful brand in a solid, yet increasingly competitive, space. LULU needs to not only be a great brand, but a great company. Then and only then will it be a great stock. We think management is coasting on the power of the brand, by tweaking a legacy operating plan, blindly opening stores, and hoping that nothing else goes wrong. Hope, however, is not a profitable growth process.

AMZN, ETSY - Amazon Handmade, a competitor to ETSY, has been officially launched.  The concept connects makers of handcrafted goods with Amazon shoppers.  Select sellers have been using the platform for several weeks.


National Retail Federation Forecasts Holiday Sales to Increase 3.7%, vs +4.1% Last Year


AMZN - Jet.com, which launched July 21, has decided to abandon its membership fee model in hopes of attracting a broader customer base.  The $50 annual fee was planned to be the profit center for the company while selling at ultra thin margins.


TJX - The TJX Companies Announced Ernie Herrman as CEO, current CEO Carol Meyrowitz to Become Executive Chairman


Uniqlo - Fast Retailing Warns of Slowing Profit, Sales Growth


Gilt Groupe to lay off 47 staff members as part of a restructuring to be cash flow positive.


TLYS - Edmond Thomas appointed President, CEO, and Board Member replacing Daniel Griesemer.


AMZN - Amazon Prime Now expands 1hr and 2hr delivery in London market.  London was the first international Prime Now city launched back in June.