For consumer discretionary products, brand equity is the key to gain multiple benefits such as pricing power, worth-of-mouth marketing and sales volume. Lululemon Athletica is a leading experiential sports brand and retailer from Canada. The company designs and markets apparel and accessories for healthy lifestyle activities such as yoga, running and general fitness activities. Founded in 1998, Lululemon quickly grew to become one of the most valuable brands worldwide. Most notably, Lululemon’s brand value of $17.9 billion in 2021 fell just $1 billion USD short of what was required to rank in the list of Top 100 Brands. Specifically for apparel, Lululemon ranks 4th, behind Zara, Adidas (ADDYY) and NIKE (NKE).

2021 was a record year for Lululemon as the company increased total revenues by 42% year over year to $6.26 billion. The strong growth was, amongst others, driven by digital direct-to-consumer-sales, which represented more than 50% of revenues and a strong performance in Lululemon’s men’s business, which increased >100% year over year.

Moreover, in 2021 Lululemon outlined its Power of Three x2 growth strategy, which aims at doubling the company’s revenues until 2026, reaching $12.5 billion of sales. The strategy is supported by a focus on the company’s men’s business, international expansion, and digital sales. In addition, the strategy is aided by a healthy tailwind in the global activewear market, which is expected to grow at a 5-year CAGR of 7%. The tailwind is even stronger in China, where the activewear market is expected to grow >12% CAGR. For reference, between 2018 and 2021 Lululemon has grown sales at a 24% CAGR.