case study2

2/8/22, 3:10 PM Looking Ahead at Lululemon

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LOOKING AHEAD AT LULULEMON

In a March 26, 2020, conference call to discuss the company’s Q4 and

full-year 2019 performance with Wall Street analysts, lululemon CEO

Craig McDonald commented on the impacts of the coronavirus pandemic:17

2/8/22, 3:10 PM Looking Ahead at Lululemon

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… .we are seeing virus-related impact on performance across our markets. In North America and Europe, our stores have been closed since March 16. Stores in New Zealand are closed at this time, while Australia is operating on reduced hours. In China, all of our stores except our location in Wuhan are open with most operating on regular schedules. Our stores also remained open in other Asian markets, except for Malaysia, where our two locations are currently closed. In addition, we are closely monitoring our supply chain and staying in constant contact with our vendors as they too navigate this situation.

… .the underlying health of our business is strong… . we are confident in our abilities to navigate the near-term while working to realize the opportunities over the longer term… we have early learnings from China which show us that our business will bounce back. We are not yet back to pre-closing volumes, but the business is getting stronger week by week.

Although we do not know exactly when the current situation will pass, what we do know is that our stores will reopen. We know that initially the business will be lower than it was pre-COVID-19, but we believe that each day and each week, it will keep building. We are planning for multiple scenarios, but in any one of these we know that our brand is strong and has unique pillars of strength that will keep driving our momentum forward.

As of May 21, 2020, lululemon had reopened more than 150 stores across five

continents. Plans called for reopening another 200 stores over the following two

weeks. Modified store hours, store employee face coverings, physical distancing, enhanced store cleaning and sanitization, and a more relaxed return policy were

being instituted at all reopened stores.