A Thousand Cuts

The luxury downturn may be in full swing, but earnings for mass-market brands have been pretty upbeat so far, with even long-suffering retailers like Macy’s, Gap and Foot Locker showing a little pep in their step. Luluemon will test that narrative when it reports on June 5, however. The activewear giant rode the pandemic athleisure boom far longer than almost anyone expected, but momentum is flagging. The company predicted softer growth for 2024 in March, sending shares tumbling (the stock is now down 40 percent this year).

Lululemon’s biggest problem is that the same broad appeal that has driven year after year of growth is now getting in the way of the brand’s ability to hook new customers. Rather than default to Lululemon as they once did, consumers looking for something new can now shop a brand seemingly custom-made to meet their needs, whether it’s fashion-forward yoga gear (Alo), outdoors-friendly gym clothes (Vuori) men who spend all their time at the gym clothes (Ten Thousand) or loungewear (Skims). It’s a similar predicament to Nike’s, another seemingly unassailable giant that’s being nibbled away at from a dozen angles. Lululemon has stayed the course until recently, but the departure of chief product officer Sun Choe to head up Vans points to bigger changes ahead. Wednesday’s results could mark a new low point — or the start of a comeback.

Also reporting this week: Bath & Body Works, PVH and G-III on Tuesday, and Inditex and Victoria’s Secret on Wednesday.

It’s Always Fashion Week Somewhere

On Monday, Dior is set to show its Cruise 2025 collection on the grounds of a Scottish castle. It’s a decidedly un-beachy location for a resort show (it’s expected to be overcast and breezy in Perthshire on Monday), though not so out of step considering the clothes shown won’t hit stores until next winter. Creative director Maria Grazia Chiuri has used past cruise shows to showcase local craftsmanship, a tradition that’s helped animate her otherwise commercial (and highly successful) collections, while lavishing the Dior sheen and resources on local artisans and suppliers. In this context, Scotland’s reputation for high-quality knitwear and tweeds should play well at a moment when complaints about materials and construction in the luxury category are growing more frequent.

Also this week, Alexander Wang will show a collection in New York, his second since mounting a comeback after facing multiple sexual assault allegations in 2019. Wang’s return, which began in earnest in the US in 2022, is more or less complete. It’s no longer surprising to see celebrities wearing the brand, and after initially playing it safe with shows and campaigns centred on his Chinese heritage, Wang has once again embraced pot-stirring marketing. Case in point: last week’s ads featuring celebrity lookalikes, a commentary on dupe culture that felt especially timely given the kerfuffle over OpenAI employing an actor who sounded not unlike Scarlett Johansson to voice ChatGPT’s assistant. With a growing number of new North American stores, Wang’s business has also made a comeback in the West (the allegations didn’t have much impact in China, now the brand’s biggest market).

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