Yoga Brings New Competition to the Market
Depending on the company, the products are either yoga pants, studio pants, or just workout pants. The designs are all similar, but the brands are very different. lululemon athletica controls the biggest chunk of the U.S. market, with annual sales topping $1.4 billion. The success of the company has inspired imitation from almost every quarter of the retail industry. While some of the more established brands like Nike and Under Armour have obviously made a move on the market, there are some interesting offerings from other retailers as well.
Growing the market
Analysts' estimates for growth in yoga participation put annual compound growth at more than 20% since 2004. Revenue has increased as well, and annual revenue for the industry is estimated at close to $6 billion. Many of those participants are new to the sport, and a study from Yoga Journal found that about 45% of Americans who participate in yoga consider themselves beginners.
Those new participants are, in part, following the broader market. Older surveys found that as the economy suffered, so did the yoga market. The business thrives on free time and extra cash; as the market contracts, those dry up. As the market has recovered, business has picked back up and competitors have been quick to jump on the bandwagon.
Yoga revenue has generated so much interest in part due to the foothold that yoga offers businesses in the women's athletic market. Companies like Under Armour have developed ambitious plans to grow business generated from sales to women. The company is planning to grow revenue in this sector by 96% by 2016.
Other brands, including Gap's Athleta line, are also making inroads. The brand started out as a Lululemon shadow, but has come into its own. Last year, a study found that Athleta had built 13 of its 22 locations within a mile of existing Lululemon stores. Since that time, Athleta has expanded rapidly, and now the business has 35 locations.
The success of Athleta -- Gap has claimed that it has higher productivity than the company's core brands -- has led other non-athletic companies to test the yoga waters. The newest brand on the block is Fifth & Pacific's Juicy Couture. Well, it's actually not on the block yet.
Juicy joins the hunt
The tracksuit brand has plans to join the yoga fashion business in 2014 as part of a plan to revitalize the brand's image. The "lifestyle collection" is going to start with the yoga line, but will eventually expand into swimwear, watches, and footwear -- no, it's fine, I don't know what yoga footwear is, either. The move from tracksuits to yogawear is just part of a bigger brand identity change from Juicy, but anything the company can do to improve sales would be welcome. Last quarter, comparable sales slipped 4% compared to the same period last year.
Of the four brands, Athleta would be my pick for growth, Lululemon for long-term strength, and Juicy Couture for probably-not-going-to-do-great. The business has a lot of things going for it, but I think it's better off with some of the other plans it has in place, like its future lingerie line.
The article Yoga Brings New Competition to the Market originally appeared on Fool.com.Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends lululemon athletica. It recommends and owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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