Link: http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=1cd360a2-2b53-419f-a3bd-8aa6ec0df39e
Summary:
Currently, Lululemon Athletica is one of the most profitable cooperation in Canada. This well-known retailer emphasizes on yoga-inspired apparel for healthy living, which is commonly accepted by most females. As the prosperity of the corporation grows, it plans to add thirty-five stores in the next three to five years. This action will hopefully increase its popularity for its target market for females. As you all may know, the convenience for females to find their desired clothes wherever they go proves another type of popularity amongst the public. Lastly, this company is willing to spend most of its gross profit opening stores, proving its desire to attain popularity. As a result, its revenue has risen by 48%, proving a significant success in its profitability. “We create components for people to live longer, healthier, more fun lives” - Lululemon Athletica.
Connections:
As stated in the summary article, Lululemon Athletica has proven to be an extremely accepted brand throughout the last decade. In addition, one of the reasons why it makes such a large gross profit, other than its popularity, is its low cost of goods sold. Since it has a high revenue and a declining COGS, it further increases its gross profit, making it amazingly successful. In relation to our studies of Accounting 12, Lululemon is a very good example of a retailer, in fact. Furthermore, it purchases its clothes from their unique wholesaler and manufacturers and markets them to the public. Also, the concept of Cost of Goods Sold is a major portion of theory in chapter 11 and it is the high Cost of Goods Sold that gives Lululemon its thriving prosperity.
Personal Reflection:
As an average teenage male, Lululemon Athletica surely is not one of my desired stores. Hence, I do not understand its popularity and its significant growth in acceptance and popularity for females. As surveyed around my female classmates, the popularity of this brand comes from its marketed theme of comfort. Indeed, it is the technical clothing for yoga, dancing, running and other sweaty pursuits. Despite its expensive cost in my opinion, this appears to be commonly accepted everywhere. In school, many of my female fellow classmates and students possess clothes and handbags of this kind. In my environment, this brand currently marks our teenage definition of fashion and “in style”. Even though I personally do not favour anything from the cooperation, I must admit that it is doing an excellent job in attracting our modern female market.
- A.Tao
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3 comments:
Blog Topic - Lululemon
Comment - I completely agree with what Lululemon's company is trying to do. By expanding their selling territory, they hope to achieve a higher selling output, or, that's what i got from the article. I think that the business advisers of lululemon are competant and they definately made the right choice by choosing to open more and more retail store. It might be hard at first, since their using their profit to buy these retail chains, but in the end i think everything will work out for them.
John Ho
Comment - WOW.. Lululemon's accountants or business advisers are very smart in making this expansion of their territory. A 48% increase in revenue is an extremely larger amount of cash earned by the company. Personally, I would like to see Lululemon try to expand their business into the men's side of the market, as I know they have men's clothing for yoga as well. Another company that i know, or have heard rumors about, that has considered expanding is Hollister. I have heard that Hollister is probably coming to stores in Canada instead of only the US, which is almost the same move as Lululemon but Hollister will probably have a larger increase in revenue.
(Being respectful) Something that i do not get in your blog entry is your use of COGS. If the company has a high "Cost of Goods Sold", doesn't that mean that the company has a lot of money spent on the products itself like freight-in, and purchases?
P.Ngo
I also agree with John, lululemon clothing has the finest garment and are successful in the clothing industry. nice post you have.
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