Lululemon is struggling with slowing sales in China, a market that has helped the company offset quality problems, unpopular designs and an angry founder — until now.
Wall Street analysts say the China slowdown may signal a deeper challenge ahead. Rival activewear brands are expanding rapidly on the mainland just as Lululemon may be approaching saturation in its largest markets. A pair of social media controversies in May and June dented the brand’s reputation.
“China has been the driver of all profitability at the business since North America struggled,” said Laurent Vasilescu, an analyst at BNP Paribas. If the growth there stalled, Vasilescu said, “then numbers start to go down meaningfully.”
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