Although I like looking at fashion companies for their financial statements, when it comes to the wares they are selling, I am absolutely clueless. I have to ask others that know much more about the fashion aspect of clothing companies for their anecdotal opinions.
Never have I been so wrong about Lululemon:
Obviously this train ride has to end somewhere, but I just look at this chart with my jaw open. Reference my December 2010 post when I was questioning the high $2.8 billion valuation. Today: $6.3 billion.
Knockoff factories in Guangdong are tooling up for it now… expect them to see that pain in Q3 and then it to bite them properly the following year (Q3 2012).
Their customers are fickle, Lululemon is hot right now but mostly because of celebrities wearing them, this will taper once the market is flooded with fakes and then the valuation will become slightly more realistic (but probably still not reasonable). Women hate wearing things that could be considered fake – half the allure is $90 yoga pants and $150 sweatshirts that poor women can’t afford and which never go on much of a sale.
The only question i have is a coin flip at best, but which do you think will be the bigger upcoming train wreck Lulu or Netflicks?