Lululemon Stock Seeking Alpha article : My Comments

First of all, Victoria Secret already has an established yoga line. It's very competitive with tops and bottoms in the $20 range. If this reporter just typed in victoria secret yoga, he would've easily found it.

Yes, it is expensive but you have to pay for style and function . I have compared Lululemon with competitors like Lucy, Hardtail, Tommy Hilfiger, and Adidas. I have yet to compare it to Juicy Couture and Prana. You always pay for what you get. The better the design, the pricier it will be. Underarmor is actually not that cheap - they have jackets going for $200 and their coldgear is about $100 each.

Yes it trades at a P/E much higher than it's industry peers but you have to pay for growth.

Is it a small cult following that can grow outside of LA and San Francisco? Well, if you call the secular trend of wanting to be healthy and living longer a small cult following I guess it is.
I personally don't practice yoga yet I like their clothing - for comfort and good function. I don't know if men will catch on but if you ask any woman about lululemon they usually mention how good they look in it. The point is, regular people like the clothing, not just yoga practitioners.
If you read this , you will find that most of their customers don't even practice yoga. They like the look, comfort, and high quality.

Insiders pocketing $ is nothing new. Why should they not reap the benefits of taking this company public. Investors would not have been able to profit had they not. As for where money is spent, I'm amazed they don't even advertise. Their marketing dollars go instead into training of their 1700 employees.

Yes, women will cut back on discretionary items during a recession but not knowing what demographic Lululemon shoppers are we don't know to what extent they will cut back. Lululemon seems to pick their locations carefully and situate themselves in areas of high income.

Yes, the company's seaweed debacle did affect it's credibility but it did not seem to affect the bottom line since shoppers were more interested in the fashion not the health benefits. My poll currently shows that 80% don't care about Seaweed in their Lululemon.

As for Bob Meers and his resume, well it's not excusable if he really did color it but based on my poll again, 30% of people have doctored or embellished their resume.

The sales per square foot seems incredible but that's probably because of the high cost of their apparel and the strong unit economics of their new stores. They never have sales except for their warehouse sale and most of the time, people pay full retail. How many stores did he visit to gauge this metric (sales per square foot)? One? Two? They have 81, not 70. Read the webcast notes - John Currie, CFO, talks about this in the recent ICR Conference. No doubt in time, any company will need to taper down it's growth but hopefully not while it's in expansion mode.

Will the stock go into the single digits? Currently, the company has reaffirmed guidance and until the end of February when they disclose their earnings, we don't know where the stock is headed. I will continue to pick at this stock and profit from it until the story changes. Incidentally, a third of my readers think it will go to $60 this year, a third think it will do that in 2009, and the final third think the stock has peaked. In short, investors are divided. Retail stocks have suffered greatly in the last 2 months some of them dropping 30-40%. Interest rates are coming down however and that bodes well for this sector. Money managers will be trying to find value in this market and rotate back into the beaten up financials and retail names. I must say though that when stocks are tanking, the media likes to come out in full force and talk about the demise of stocks, adding to the bearish tone. Panic begets panic. Well, that's their job. Oftentimes, by the time all the articles come out, the market has already bottomed, like it did on Jan 22 when the DOW opened 500 pts. lower, and it's time to reinvest in stocks. (Lulu opened at $26.99)

Also, will the writer of the article disclose if he has a short position on the stock?