Canadian yoga apparel manufacturer Lululemon Athletica Inc announced on Thursday that it will close most of its Ivivva girlswear brand stores, with its first-quarter data released the same day surpassing analysts’ expectations. Following the news, Lululemon’s stock price soared up to 16% on Friday, peaking at $56.85 and closing at $55.78 per share.
Lululemon said it will close 40 Ivivva stores (out of a current total of 55). The Ivivva girlswear business line will be refocused on e-commerce in the future. Of the remaining 15 stores, eight will be converted to operate under the Lululemon brand, while the other seven will remain open as key touchpoints for maintaining the customer base in the North American market.
In addition, the company will close all Ivivva showrooms and revamp its infrastructure, with estimated restructuring costs for Ivivva in 2017 between $50 million and $60 million (including $17.7 million in the first quarter).
Lululemon is known for its high-end casual sportswear fashion, but in recent years, competitors have been launching lower-priced athletic apparel, posing challenges to its growth.
Lululemon CEO Laurent Potdevin said he is excited about the company’s future growth strategy and believes the restructuring of Ivivva is the best direction for that part of the business.
