What: The athleisure giant Lululemon is struggling with falling sales in the Americas, overstock, and a loss of brand buzz, as new rivals and changing consumer preferences reshape the global sportswear landscape.

Why it is important: This case demonstrates how external factors—such as tariffs, changing trends, and new competitors—can quickly erode market leadership, forcing established brands to rethink strategy and customer engagement.

Lululemon, once the undisputed leader in athleisure, is now facing a series of setbacks as sales decline in its core Americas market and inventories outpace demand. The brand’s recent product launches have failed to resonate with its loyal customer base, while efforts to attract younger shoppers with logo-heavy and casualwear lines have not generated the desired buzz. At the same time, new competitors like Alo and Vuori are gaining ground, and fashion trends are shifting away from fitted leggings toward baggier styles and denim. The company’s reliance on manufacturing in Vietnam and China has left it exposed to new US tariffs and the elimination of the de minimis waiver, raising costs and threatening margins. Heavy discounting of core products, such as its iconic black leggings, is further eroding brand value. Lululemon’s experience underscores the volatility of fashion retail and the need for continuous innovation, agile supply chain management, and adaptive marketing to maintain relevance in a rapidly evolving global market.

IADS Notes:

Lululemon’s recent challenges reflect broader shifts in the global fashion and luxury retail landscape. As reported by WWD (April 2025), even industry leaders like LVMH are experiencing revenue declines due to shifting consumer demand, market volatility, and the impact of tariffs. Forbes (June 2025) highlights a wider slowdown in luxury and premium retail, with brands facing inventory build-ups, increased discounting, and changing fashion trends—paralleling Lululemon’s struggles with overstock and the waning appeal of core products. Vogue Business (March 2025) explores how global trade tensions, the end of the de minimis waiver, and supply chain restructuring are raising costs and operational risks for brands sourcing from Vietnam and China, directly impacting Lululemon’s pricing and profitability. The Financial Times (June 2025) further underscores how tariff changes and the elimination of duty exemptions are forcing brands to rethink their e-commerce strategies and pricing models in the US. Collectively, these developments illustrate the heightened vulnerability of even top-performing brands to external shocks, the need for constant innovation, and the importance of agile supply chain and marketing strategies in a rapidly evolving retail environment.

How Lululemon fell out of fashion