In supplemental documents distributed at Nike’s (NKE) investor day, the brand provided a game plan for how they plan to cash in on the young, affluent, active female demographic; “pants studios” and “sneaker boutiques”. On November 1st, NKE will open the first of 5,000 “pants studios”; dedicated space within their stores to showcase pants, organized by sport or activity. The company has been pouring R&D dollars into the female demographic, even vowing to rethink athleisure pants beyond tights; and for good reason, women’s athleisure is a $7 billion industry that they see growing.

Howie Long-Short: Lululemon (LULU) has competitors coming from all directions. Amazon (AMZN) is creating private label sportswear lines using LULU manufacturers and now NKE is introducing 5,000 “pants studios”. While LULU CEO Laurent Potdevin can argue AMZN is playing in a “very different playground” (I would debate that), there is no doubt NKE is going after LULU’s target clientele. As NKE President Trevor Edwards stated earlier this week, “our growth in our women’s business is outpacing our men’s business, and it will continue to do so”. Unfortunately for LULU shareholders, that growth looks like it will come at your expense.

Fan Marino: Nike’s revamped strategy for women’s sneaker sales (i.e. sneaker boutiques), focuses on the premium and sub-$100 categories. The company has reported sales are up 30-50%, at stores running the “sneaker boutique” pilot program.

Nike reportedly set to open yoga pant studios in stores, sending Lululemon shares lower

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Author: John Wall Street

At the intersection of sports & finance.

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