Why Are Lululemon Leggings So Expensive?
If you’re even remotely familiar with the brand Lululemon, you probably know two things about their leggings:
They’re very popular.
And they’re very expensive.
As someone who has also started an apparel brand, I’ve spent a lot of time studying other successful companies. And while I promise our running sunglasses will never cost more than Lululemon’s leggings, I was curious to find out why they’re so expensive.
How Much Do Lululemon Leggings Cost?
Before I jump into why Lululemon’s leggings are so expensive, let’s quickly look at just how expensive they actually are.
Lululemon’s most popular leggings cost between $98-$128.
Which is…a lot.
To put that into perspective, most fashion journalists (of which I am now technically one) compare Lululemon leggings to Gap Inc.'s Athleta in terms of quality.
Are Lululemon Leggings Overpriced?
In a word, “maybe.”
There’s no doubt that these popular leggings have raised a lot of eyebrows with their prices. Does that automatically make Lululemon overpriced, though?
I should point out that the women I’ve talked to who own Lululemon leggings absolutely swear by them. They may not be huge fans of the price tag, but they are huge fans of how they fit and feel.
One reason for this is that Lululemon has put a lot of effort into perfecting their leggings’ designs. There seems to be a major misconception out there that Lululemon became so popular solely because of savvy branding. While the company is fantastic at branding (I’ll talk about that in a moment), it’s hardly fair to give their marketing department all of the credit.
For example, to create the comfortable feel for which Lululemon’s leggings have become famous for, the company invests in some very high-quality materials. Specifically, these are:
Sure, by buying these materials in bulk, Lululemon is probably able to limit their overhead to some degree.
But you’re not going to find this same combination in more run-of-the-mill leggings.
…which is why Lululemon can afford to charge more.
And yet, those materials aren’t the only reason so many women love Lululemon leggings.
Another is that Lululemon’s manufacturing practices, which involve a large number of expensive machines that cost tens-of-thousands of dollars apiece. The company’s VP of global product quality once claimed that, “In the testing of the product there’s probably 13 to 15 tests that go on. Every single lot of the fabric is tested before it leaves the mill.”
That’s a lot of quality control, which probably leads to a lot of overhead.
Furthermore, the company’s “materials innovation director” once stated that, “We use special very fine microfiber yarns with a very special yarn construction”, adding that they once “…made [a] fabric 55 different ways to come to our current formulation that would give us one of the best fabrics in the industry.”
So, suffice to say that Lululemon’s leggings aren’t just expensive to buy. They’re expensive to make, too.
Still, when people wonder why Lululemon leggings are so expensive, what they really seem to be asking is…
What Is the Markup on Lululemon Leggings?
In other words, people want to know what it actually costs to make Lululemon leggings, so they know how much the company makes from each pair.
Alright, so we have cold, hard facts to back up how much Lululemon leggings cost and a pretty good idea of what goes into making them.
Figuring out how much of a markup there is on Lululemon leggings is going to be a bit harder because, well, the company doesn’t exactly tell the public, “Hey, it actually only costs us $X to make these things!”
Instead, I’ve spent an inordinate amount of time reading breakdowns from all over the Internet about how much it probably costs Lululemon to make their leggings.
That number seems to fall to about $3-5 per pair.
A $90+ markup has to be pretty good, right?
Well, I looked into that, too.
It turns out that the average profit margin for retail clothing items is between 4-13%. In order to compare that against the markup I just mentioned, we need to do a little fancy math.
Even if Lululemon leggings cost $5 to make, the most affordable versions would still come with a 3,166.67% markup.
Side note: if you want to learn about another market with crazy high markups, I've also written a post that explains why sunglasses are so expensive.
The Real Story Behind Lululemon’s High Prices
Are Lululemon’s leggings some of the best on the market?
A lot of women certainly seem to think so.
But is that why they cost upwards of $90 a pair?
The materials and manufacturing practices are definitely two very important factors.
But there’s a third element that deserves mentioning, too: fantastic marketing. The company has always relied heavily on lifestyle marketing. From the inspirational slogans around their stores, to the in-person yoga events they’ve held, to the positive imagery they’ve built around their brand, Lululemon has designed a marketing strategy that’s impossible to imitate.
When combined with an equally unique product, it’s no wonder the company has experienced such unprecedented success, growing from $0 to $48 billion in just over 20 years.
Lululemon’s success is a case study in how to effectively take over an industry with savvy marketing. This is all the more impressive considering that the industry, retail apparel, is arguably one of the most saturated on the planet.
Clearly, they’re doing something right and no amount of people claiming Lululemon overcharges is slowing down those efforts.
If anything, given how popular the topic of Lululemon’s prices has become, it’s very possible that keeping their prices high is part of their marketing strategy – one that has been very successful.
So, don’t expect Lululemon to lower those prices anytime soon. Even the pandemic couldn’t slow down the company’s revenues.
From the materials to their manufacturing to their marketing, Lululemon has worked hard to ensure that people love their leggings at any price.