During a keynote session on Tuesday at the National Retail Federation's Big Show in New York City, lululemon CEO Calvin McDonald addressed the retailer's future plans and goals, among other topics. McDonald was interviewed by CNBC anchor and reporter Sara Eisen. Here are some of the highlights from McDonald's answers.
Global Ambitions
Core to lululemon's growth strategy is extending the brand's reach outside of the U.S. This is being done primarily through new store openings as well as outfitting world-class athletes in lululemon gear.
"We want to be a global dominant brand," McDonald told the audience. "There's no reason that 50 percent of our sales can’t be international."
China is currently the second largest market outside of the U.S. for lululemon, a country with a growing culture of mindfulness and health, said McDonald. In addition to China, lululemon will be entering a number of new markets in 2025, including Italy, Denmark, Belgium, and the Czech Republic.
Not Just a Women's Brand
McDonald indicated that growing lululemon's men's business is a top priority in 2025. The menswear category accounts for 25 percent of the lululemon business in the U.S. McDonald believes there's plenty of opportunity for that number to grow.
"We’re growing away from just being a yoga brand for 'her.,'" McDonald said. There's a dual gender aspect to the brand."
A Full-Price, Innovation-Led Retailer
McDonald was asked by Eisen if lululemon identifies as a technology company. His response?
"We’re an apparel organization, not a tech company. However, we are leveraging technology to improve the customer experience. We're using data and AI to transform the DTC experience. There's been a lot of work internally to utilize data for logistics, [product] design, marketing."
In a similar fashion, lululemon relies on a commitment to innovation, particularly focused on product design and manufacturing, to help it gain customer loyalty. And that loyalty is won without the use of promotions and discounts, which have become so commonplace in today's retail ecosystem.
"Being a full-price retailer is not hard to do if you are innovative," McDonald said. "A disproportionate amount of our core product is not seasonal. We don’t create product for markdown. We believe in being a premium, full-price business through product innovation."
Building Culture Through Talent
McDonald was quick to point out that having the right people is integral to lululemon's current success and future growth plans.
"We seek the best talent from diverse backgrounds and experiences," McDonald told the audience. "People that choose lululemon for the culture and spirit of the brand. We're looking for people that share similar values as the organization and have fun in creating cool shit. It's a startup mentality inside an organization that is growing."
To help create a strong connection between the organization (i.e., leadership) and its employees, McDonald spends a lot of time on shop floors.
"I need to be out talking to frontline employees," said McDonald, adding that it's his job to build relationships and trust.
2025 Outlook
Eisen asked McDonald for his forecast for lululemon in 2025. He touched on several themes that were repeated throughout the session.
"We’re optimistic," McDonald said. "As with every quarter and year, there could be new macro challenges that pop up. We need agility and our team has proven to have that. The consumer will spend — they have proven that. But they are going to be selective. We are a full-price, innovation-led business, which is unique. To do that you need growth to reinvest in innovation. The chasm between the haves and have nots will continue to grow."
3 Things on His To-Do List
The session concluded with McDonald being asked what is on his to-do list for lululemon. He shared three goals for the next six years:
- doubling the size of the business through international expansion and becoming the brand of choice for athletes;
- building a strong culture — competition and performance matter, but I want to win the right way, McDonald said; and
- continuing the strides the brand has made in sustainability.
- People:
- Calvin McDonald