The world is full of fine materials and products but you need a brand in order to distribute them to the market place. When a strong brand comes along a seasoned investor understands the potential for that brand to expand into anything in the sports category. LULU will sell many other lines and sport types soon.
Wrong! That is OLD OLD news and there is no lawsuit.
That article from the times is from 2007! Lululemon has long ago dealt with the problem.
Here's an article for you,
Lululemon Scandal Appears To Be Over:
no they didnt. It said in the article they they could not definitively prove they there was NOT seaweed in the clothes. IE the study was inconclusive. Nice try though! If they were ever taken to court over it, the study could not be used because they came up with zero result in either direction. The lab techs must have been as dumb as you and wall_st_bling
"...Translation: right now LULU is a LAGear but it could, over time become a Nike..."
LOL....LULU could become a Nike?
ROFLMAO....that's one of the most IDIOTIC statements that I've ever read.
Get a clue, sport.
So let me get this straight. It's LA Gear, but you are going to pay as if it is NKE because it COULD become NKE? By the way, NKE lost 50% of its value in the last financial crisis.
First, LULU is going to have to defend the category it created as all competitors enter products. Second, LULU will begin to saturate the "high end" market. Third, it looks like we are heading into a correction at a minimum, but more likely a bear market and double dip recession. High end product suffers disproportionately in bad times.
You might be right for the next few weeks and get 5-10% more. I'll stick with the high probability LT play that this loses 50% or more of its value within 6 months.
I understand that you are paying for potential that is extremely unlikely to materialize. In 1997 NKE hit about $15B market cap, only to lose half of it until by 2001.
Smart investors don't pay 80 earnings for retail companies. The risk of the fad ending is too high. Frankly, there is 100% certainty that this stock will be able to be purchased for less within a couple of years. Go back and look at NKE, which is the most successful athletic brand ever. Also, for context, realize that LULU is already valued far higher than NKE was when Michael Jordan was still playing and it had the Be Like Mike campaign. At the time, NKE was around $5B valuation.
Delude yourself all you want. When the market crashed, Nike dropped back to a $20B valuation. What do you think will happen to LULU? It will lose 75% of its value. Period.