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Lululemon will sell personal care products beyond the garment

Lululemon launches a range of body care items including a facial moisturizer and a lip balm.

Source: Lululemon

Lululemon knows that where there is exercise, there is sweat.

In an effort to expand beyond its core business of clothing, the manufacturer of yoga pants and patterned sports bras began Tuesday selling personal care products in 50 stores and online. The range includes a dry shampoo, a deodorant, a moisturizer for the face and a lip balm.

Lululemon is already seeing explosive growth. Traffic in its stores increased 8% in the last quarter, while digital sales jumped 35%, exceeding expectations. And while analysts do not anticipate that momentum will soon slow down, Lululemon shows that it is entirely possible to thrive in new categories.

"The main engine remains our main categories, for both men and women," such as leggings and jogging pants, told analysts general manager Calvin McDonald this month. "However, we have identified several areas of white space in which we can test the waters and bring innovation to our customers."

In addition to his new line of body care, Lululemon also suggested launching his own line of shoes.

Investors love it. At the close on Monday, Lululemon's stock rose more than 50% in one year, bringing the company's market value to nearly $ 24 billion. In comparison, Nike shares rose nearly 11%, bringing market capitalization to just over $ 129 billion. The S & P 500 Retail ETF (XRT) rose only 2.9%.

"We believe that the sports industry remains one of the highlights in a challenging retail environment, and Lululemon enjoys one of the strongest dynamics and visibility in the industry," said L & R. Wells Fargo analyst, Ike Boruchow, in a research note.

Lululemon Dry Shampoo will cost $ 34. The deodorant is $ 18, the moisturizer for the face is $ 48 and the lip balm is $ 14. These first three items are also available in travel sizes.

Buzz built around the summer opening of a new type of Lululemon store in Chicago.

The retailer is currently completing a huge 20,000 square foot store in the Lincoln Park neighborhood with yoga studios, a juice bar and a meditation area. By 2023, about 10% of its physical stores will be considered "experimental", just like the new Chicago store, Lululemon said.

"What Lincoln Park will do for us is to regularly introduce many such experiences between the four walls into the community," McDonald told analysts. "We think this could become another mix within our portfolio of how we are entering a market and providing our experience to our customers.But it's a test … we'll learn and we'll go from now on. "

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