Lululemon knows it’s got a store layout problem, and it’s rolling out a fix.
During a Thursday earnings call, company executives announced plans to enhance the athleisure giant’s in-store experience by reducing clutter and curating pieces better.
“We plan to reduce the density of our assortment on a local basis to better highlight styles that are most relevant,” Meghan Frank, Lululemon’s finance chief, said.
“This will enable improved visual merchandising for the styles we know are most important to the guest in each local market,” she added.
CEO Calvin McDonald added that the company was testing the new store experience in Los Angeles and Miami, working on “curating the stores, desorting, taking product out, so that we could put focus on the newness.”
Representatives for Lululemon did not respond to a query from Business Insider regarding when the changes will be implemented across all stores.
The plan to improve store experience comes after analysts have criticized it for months.
Jefferies analysts said in a November note that Lululemon’s store layout “appeared disjointed, with an inconsistent color palette and lack of design cohesion.”
In an October note, they said the collection was “fragmented” and featured many “logo-heavy designs” that are not resonating with its core audience. An August note said that store inventory was “very high” as the brand tried to clear aged stock.
A July Jefferies note, analysts said some of the stores they visited were missing critical stock, like the brand’s yoga leggings without front seams.
Lululemon reported a third-quarter revenue of $2.6 billion, a 7% increase from the same period last year. Its net revenue in the Americas decreased 2%, while its international sales increased 33%, buoyed by strong sales in China.
McDonald announced in the call that he would be stepping down at the end of January. Frank, as well as the CCO, André Maestrini, will serve as interim co-CEOs until the company finds a replacement for McDonald.
Its stock rose more than 10% in after-hours trading on Thursday after earnings and the announcement of McDonald’s resignation. However, it’s down about 50% since the start of the year.
