Runway to regret: Will Disney x Lululemon be another collaboration that goes out of style?

seekingalpha11-23 03:47

xxwp/iStock via Getty Images Jefferies Randal Konik doubled down on his bearish thesis for Lululemon (NASDAQ:LULU) and dismissed the company’s collaboration with Disney (DIS) as an ill-conceived ...

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The jury is still out if Lululemon  can make its Disney  partnership work. The announcement gave a nice lift to Lululemon  stock, but Konik warns of the sustainability of the move given the issues he observed with the “Law of Large Numbers,” namely increasing competition, China risk, and the potential loss of core customers as LULU shifts from its original yoga-inspired identity to a brand more similar to the Gap .","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4202":"服装、服饰与奢侈品","BK4588":"碎股","BK4585":"ETF&股票定投概念","LULU":"lululemon athletica","BK4504":"桥水持仓","LU0823411888.USD":"法巴消费创新基金 Cap"},"translate_title":"后悔的跑道：迪士尼x Lululemon会是又一次过时的合作吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LULU":0.9},"content_text":"xxwp/iStock via Getty Images Jefferies Randal Konik doubled down on his bearish thesis for Lululemon (NASDAQ:LULU) and dismissed the company’s collaboration with Disney (DIS) as an ill-conceived effort to attract non-core customers. “[Lululemon’s] core customers want workout and athletic products, not clothes to wear to Disney World,” Konik says.  Disney x Lululemon is a new, 34-piece limited edition collection, pairing Lululemon (LULU) sportswear with iconic Disney (DIS) characters and the Disney logo. The line was launched in North America on November 12 and in Europe and Asia on November 13. Pieces are available at both Lululemon (LULU) and Disney stores, as well as online on the Disney (DIS) and Lululemon websites. “I see a company that is stretching to find growth by expanding into non-core categories to attract non-core customers as growth in the core has hit a wall,” Konik says, adding that non-core products like sweaters, skirts, and hair clips are already seeing sharp markdowns.  This wouldn’t be the first time a collaboration raised eyebrows and ultimately ended in a bruised bottom line. There was the Yeezy/adidas (OTCQX:ADDYY) pairing that ultimately cost adidas (OTCQX:ADDYY) $540M in unsold Yeezy products and projected loss of revenue of ~$1.28B to discontinue the line.  Gap (GAP) also took a stab at a collaboration with Ye before the retailer pulled the collection after “disagreements” with the rapper who aspired to be the Steve Jobs of Gap (GAP). The two hammered out a 10-year deal that was scraped after just two years when the idea of displaying merchandise in garbage bags and West’s anti-Semitic remarks caused a major backlash on social media.  Remember in 2021 when Balenciaga put the Simpson family on a line of T-shirts and hoodies (yes, those Simpsons)? Hoodies with an image of a smirking Bart Simpson sold for a pricey €750 in 2021 and are -- not surprisingly -- no longer offered on Balenciaga’s website, but instead turning up on eBay (EBAY).  The jury is still out if Lululemon (LULU) can make its Disney (DIS) partnership work. The announcement gave a nice lift to Lululemon (LULU) stock, but Konik warns of the sustainability of the move given the issues he observed with the “Law of Large Numbers,” namely increasing competition, China risk, and the potential loss of core customers as LULU shifts from its original yoga-inspired identity to a brand more similar to the Gap (GAP).","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2485215402"}