Lululemon hit rock bottom when the following occurred:

-CEO Christine Day resigned

-Recalls for see through pants

-Chip Wilson the founder of Lululemon blamed this on women wearing it possibly being too big (article here)

These three things all happened to Lululemon within the year and they not only hurt the brands image, but, also the brands stock price.

Now in an attempt to rejuvenate the brand, the new Lululemon CEO Laurent Potdevin hopes go expand internationally and tap into both the European market and Asian market. This is going to be a very risky move because it is a very competitive industry with competition such as The Gap coming out with much cheaper alternatives and Lululemon is a less known brand in those markets.

Lululemon has positioned themselves at the top of the yoga/athletic clothing market therefore charge a premium price for their apparel. It is unclear how the European and Asian market will react to the higher prices in comparison to competition. There is however, clearly a lot of potential for increased profits and global market share if the expansion works. Lululemon will be going to these international markets using “Direct Investment”. This is the highest risk strategy for international expansion, yet highest reward.

It will be very interesting to see how the Lululemon marketing team markets their product in these areas. Will they use similar marketing techniques as in North America? Will the brand be recognizable in these markets? If not, how will the justify the high prices on a brand that no one has heard of?  These are all very difficult tasks that the marketing team for Lululemon is going to face.

Will this move reward the stock holders and help revive the companies financial statements and possibly give the brand a better public image? Or will this move be the beginning of the end for the Canadian company?