Lululemon bets on stars of F1 and golf to move past yoga roots

LULULEMON Athletica is embarking on a big marketing shift by betting on a roster of athletes to help pull the yogawear brand out of a sales rut and grow beyond its downward-facing dog roots.

The company has done little traditional sports advertising on its way to surpassing US$10 billion in sales, but now American tennis star Frances Tiafoe is wearing Lululemon apparel at the US Open, and American golfer Max Homa dons the brand’s gear on the PGA Tour.

In the clearest sign of the company’s grander ambitions, it also signed seven-time Formula 1 champion Lewis Hamilton as a brand ambassador. 

“We have had a very big year of bringing on additional athletes, and we are now in real development,” Nikki Neuburger, Lululemon’s chief marketing officer, said in an interview.

Lululemon is looking for answers to win back investors after the stock has fallen by about 50 per cent this year, erasing all the gains since the pandemic when the company’s sales surged as shoppers gorged on apparel.

Executives have warned that US consumers are cutting back spending. Adding more pressure is that chief executive officer Calvin McDonald hasn’t backed off a lofty revenue target of hitting US$12.5 billion in sales by the end of 2026. Analysts on average predict it will be about US$500 million short of that goal.

Investors will get more insights into how McDonald’s push to revive sales is going on Sep 4 when the company reports earnings. Last quarter the retailer surprised the market with a quarterly outlook for sales and profit that fell below estimates, causing shares to plummet.

Lululemon looked unstoppable for more than a decade with its black yoga pants making their way into what seemed like every woman’s closet. Teens flocked to its casual clothes, and entry into men’s workout gear only added to the brand’s momentum as it lured more shoppers than ever.

But those days are over – at least for now. The robust growth that boosted revenue 140 per cent in four years has dissipated.

Younger rivals like Alo Yoga and Vuori are grabbing market share. Like the rest of the apparel industry, Lululemon is also trying to balance tariff costs and maintain its bottom line. And it’s trying to solve a new puzzle created by that period of mass expansion.

“It’s ubiquitous,” said Simeon Siegel, a longtime retail analyst who previously worked at BMO Capital Markets. “Right now, Lululemon is a strong brand but it’s overstretched.”

In Lululemon’s early days, the brand promoted its products through what was, at the time, an unconventional network of influencers.

It didn’t have big-name athletes and didn’t care about competitive success, choosing instead a yoga-centric approach, signing experienced yoga instructors along with a network of local influencers in areas like training and wellness.

That yoga network remains integrated into Lululemon’s ecosystem, but as it expanded product lines, the brand needed bigger names. There’s no LeBron James of yogis – at least not one nearly as famous and marketable as the four-time NBA champion.

When the retailer began selling tennis and golf products, offering racket bags and shorts for the court and trousers and polos for the links, it needed some stars. So it began building a squad with golfers Lee Min-woo and Homa, plus tennis players Leylah Fernandez and Tiafoe.

Lululemon’s larger competitors such as Nike and Adidas all play in many sports and spend a ton of cash promoting different product lines. Neuburger plans to keep the brand’s roster tight, rather than signing hundreds of names across sports like Nike and Adidas.

“We are not paying as much as our rivals,” she said. “If you talk to most of the folks on the roster, they could be one of many somewhere else or they can actually be in it with Lululemon.”

Signing athletes to promote a brand also comes with risks because they could get into trouble off the field or underperform. In Lululemon’s case, Tiafoe bowed out earlier than expected at the US Open last week. Meanwhile, Homa has just one top five finish on the PGA Tour this year.

One area where Lululemon’s rivals clearly have a lead is in the shoe business, and the yoga brand must find a way to steal market share with its nascent sneaker lines if it ever wants to be as large as the incumbents. McDonald said in June that management is in a “test and learn” process in the sector. The company doesn’t break out footwear sales.

It’s unclear if Lululemon will move toward the big-name shoe deals that have defined the industry for decades, like Nike with Kevin Durant or Adidas with Anthony Edwards.

Lululemon has dabbled in basketball, even releasing a co-created apparel collection with Jordan Clarkson, a former Sixth Man of the Year who recently joined the New York Knicks.

Meanwhile Lululemon has inched its way into other competitive sports through more athlete signings in soccer and running. It’s also the official outfitter for the Canadian Olympic team and has developed a fan apparel line for the National Hockey League.

But Neuburger insists that the actual competition in these sports is not the priority like it is at Nike.

“They are very focused on winning, literally,” said Neuburger, referring to a recent Nike ad campaign that declared that winning is not for everyone. “Ours is more about the journey as opposed to the destination.” BLOOMBERG