Oh how we love the rumour mill! Recently it has come to light that struggling yoga pants maker Lululemon Athletica Inc. may have some serious buy-out interest due to a 16% drop in forecasted earnings. The 16% drop decline is added to the $5.5 billion already lost in last year’s product recall and management shakeup. According to an article by The Business of Fashion, Lululemon will probably not want to sell during a decline, but the drop in marketshare could encourage an opportunistic buyer to make an offer.
In order for the sale to take place, potential suitors will have to court Lululemon’s largest shareholder- founder Chip Wilson. According to BOF, the two most likely purchasers are VF Corp., the $27 Billion owner of Vans and The North Face brands and the $22 Billion Adidas Group. Industry analysts are thinking that that the Adidas group may be the best candidate as the world-renowned sporting-good maker could help guide Lululemon’s global expansion.
If you get a chance, take a look at the Business of Fashion article, as it also alludes to the fact that NIKE would be an excellent suitor.
“Nike Inc. may also be interested in adding Lululemon’s tank tops and yoga pants to its athletic lineup, according to Jennifer Black, chief executive officer at Lake Oswego, Oregon- based Jennifer Black & Associates LLC, who said the company’s takeover prospects will increase if it continues to struggle this year.”
Source: Business of Fashion