Lululemon ranks top 3 for most productive U.S. retailer

    By Noel Hulsman | Small Business

    All of those C$108 sweatpants and C$168 windbreakers add up. For Lululemon it means it's now the most productive retailer in the U.S., behind only Apple and Tiffany's.

    Productive here means squeezing the most dollars out of total square footage. Lululemon cracked the top five by raking in $1,936 per square foot of floor space across the company's 100+ stores in the U.S. Amongst clothing companies that was good enough for first place, according to the survey of over 200 chains by RetailSails, a New York-based consultancy.

    The key in these rankings, of course, is not to sell anything inexpensive, or if you must, make sure it doesn't detract from the $150 hoodies you'd rather be selling. Lululemon has distinguished itself in this regard, offering a scattering of $12 headbands and socks, but reserving the vast majority of its floor space for higher-end items.

    To its credit, the Vancouver-based retailer didn't just soar to the top on sticker price alone. It also ranked amongst the top 10 fastest growing companies for year-over-year increases in store sales, the RetailSails report says.

    Lululemon drove US$943 million in revenue from its U.S. network during the past 12 months, a 38.6 per cent increase from the previous year. That gain put them in 8th spot, well behind women's fashion retailer Vera Bradley (79.2 per cent) and luxury brand Michael Kors (77.9 per cent), but ahead of Apple and Tiffany's, neither of which cracked the top 10.

    While these rankings speak to the overall performance of the companies, on some level, it's a comparison of apples and oranges. Apple, with its square footage sales of US$6,050, proved to be three times more productive than Lululemon. Tiffany's appears fully a third more productive, averaging US$3,017 per square foot. However, Apple obviously specializes in C$999 laptops and C$499 iPads. Tiffany's is famous for its diamond jewelry. It's hard to compete with that on a storefront basis when you're clientele is seeking yoga mats and sweatpants.

    Much more compelling numbers for Lululemon CEO Christine Day is the retailer's 15 per cent increase in same-store sales in Q2, a metric that's often considered the most telling in retail circles. Also impressive is the company's 33 per cent jump in second-quarter net earnings.

    Day could be forgiven for becoming somewhat accustomed to such results. It was only a few months ago, after all, that the company was named the fastest-growing Canadian brand, saw its value triple and surpassed Canuck icons Bombardier and Canadian Tire on the list of best brands in the country, according to consulting firm Interbrand.

    Perhaps not surprisingly, investors greeted today's news with muted enthusiasm, bumping the stock up all of 1.4 per cent on the TSX to C$70.15 as of posting.

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