Why Won't Under Armour Challenge Lululemon in the Athleisure Market?
Under Armour (NYSE: UA) (NYSE: UAA) and Lululemon's (NASDAQ: LULU) paths diverged over the past three years. UA's stock plunged over 40% as it struggled with soft demand in North America and tougher competition from Nike (NYSE: NKE) and Adidas (OTC: ADDYY). Lululemon's stock surged nearly 200% as it retained its position as the "best in breed" leader of the booming athleisure market.
Therefore investors are likely wondering why UA isn't expanding into the athleisure market to diversify its business away from traditional footwear and athletic apparel. However, UA CEO Kevin Plank dismissed that notion in a recent CNBC interview, stating that the company planned to stick with "performance" products instead of entering the athleisure market. But does that strategy make sense, considering how crowded the "performance" market is and how fast the athleisure market is growing?
Image source: Under Armour.
Source Fool.com
