Yes they ( Gap ) may be stupid enough to open next to LULU but it does not work. You can see that here in California. No one shops Athletas as it is like the Kmart next to the Nieman Marcus. Niemans is going to win. The customer wants cool, up to date fashion that is technically advanced and looks good enough to go to Starbucks and run errands. Gap is well Gap.I am still looking for a pull back but not as steep as I first forecast. 55 is my near term target unless they get a rework on the recalled product then look out going to 75 quick.
Women shop at both. Even the presence of an athleta on the block limits how much LULU can raise prices -- women may prefer LULU (increasingly less, esp as Athleta has a much better return policy and covers more sports), but they also prefer to save money and to get a wider selection of items.