Nike Chief Executive Mark Parker has said that the U.S. retail landscape is “not in a steady state.” Kevin Plank, CEO of Under Armour, has acknowledged it is “a difficult time for many retailers out there.” But Laurent Potdevin, Lululemon Athletica’s chief executive, isn’t nearly as dour about the industry as brick-and-mortar players face continued pressure from e-commerce giants like Amazon.com.
“The future of retail is bright,” said Potdevin in an interview with Fortune. “It is different than what we are experiencing today. It is going to have to evolve.”
Lululemon (lulu, +11.55%) enjoyed a stock market rally on Friday, a day after the yoga- and running-gear maker reported better-than-expected sales and profit growth for the fiscal first quarter. But in another sign of how retail is forced to confront a challenging environment for physical stores, Lululemon also announced it would close all but 8 of the company’s youth-focused ivivva-branded stores.
Potdevin says the decision to close those stores was “not a reflection of the retail environment,” but because Lululemon doesn’t see that brand as a $1 billion opportunity like other growth levers that the company is pursuing in a bid to double sales to $4 billion annually over a five-year period. The initiatives that Lululemon is more bullish about include expanding abroad, especially in Asia and Europe, an expanding e-commerce business and the opportunity to sell more gear to men (only 20% of sales today are derived from men’s gear).
As it relates to the physical retail store experience, Lululemon is in a unique position as it is an apparel retailer that only sells its gear in Lululemon-operated stores. Rivals like Nike (nke, +1.30%), Under Armour (uaa, +1.98%), and Adidas (addyy, +0.86%) all rely on relationships with department stores, sports specialty stores and other retail partners, as well as their own fleet of stores, to sell their clothes and shoes. That’s led to some…