We all know about Lululemon, the company famous for its “yoga inspired athletic apparel ” , that made waves across the market. But recently, the vivacious seeming company was in the news for something less athletic and rather more stationary: Their inventory.
After already having a reputation of a firm which has been unable to manage inventory in the past and just having worked on that, In March of this year according to reports and articles, Lululemon was yet again facing the same issue. It’s stores were constantly buzzing with stock clearing events such as “Spring cleaning”, “warehouse sales” etc. However The most interesting post-problem strategy that Lululemon has, in my opinion, is the “we made too much” section on the companies web page; this section offers heavy discounts on remaining inventory.
My aim on this post was to explore different perspectives on the problem and touch on them; At first i thought like a customer, and this problem didn’t really affect my perception of Lululemon. In fact, Customers may see this as a win-win, new stock which gives new styles and fashion, and old stock sold at reasonably low prices or rather, customers may not even give a second thought to this. But what about investors? Would I invest in a company with a low inventory turnover ratio? This point of view showed me a completely different side, the side at which lululemon was at a risk of loosing potential investors and upsetting the existing ones.
On the other hand, here is a completely different take on Lululemon having a high inventory, have a look at the video. (<-click on the word).
Sources:
Jonathan Ratner. “Lululemon Athletica Inc Has More Inventory Problems.”Financial Post Lululemon Athletica Inc Has More Inventoryproblems Comments. N.p., 23 Mar. 2015. Web. 04 Oct. 2015
