Lululemon's $98 pair looks almost exactly like Athleta's $79 pants. The materials, a mixture of nylon and Lycra, are also the same.
The Lululemon "Groove" pants are made of the brand's own patented "Full On Luon," which is 81% percent nylon and 19% Lycra.
Athleta also makes its yoga pants with its own patented material — called Pilayo — which is 88% nylon and 12% Lycra.
The only real difference we found between the two pairs of pants is that Lululemon's has a hidden waistband pocket. So is that pocket worth $20?
Probably not, which has led some analysts to wonder whether Lululemon can keep its prices so high as the yoga apparel market gets increasingly crowded.
"Our biggest concern [with Lululemon's business] lies with the flood of new competition," Morningstar analyst Bridget Weishaar wrote in a recent research note. "With few barriers to entry and new, well-capitalized entrants possessing the capability to innovate and grow quickly, we think pricing pressure will increase."
Nike, Under Armour and Reebok sell comparable yoga pants for $95, $59.99, and $38, respectively. Nike's pants are 86% nylon and 14% spandex, Under Armour's are a mixture of nylon and elastane, and Reebok's are 90% cotton and 10% spandex.
Nike/Lululemon/Athleta/Under Armour Lululemon has long had a loyal following that has helped the company fend off the pressures of growing competition. But that loyalty has begun to erode, according Weishaar.
"Lulu has now fallen victim to its success," she wrote. "With yoga increasing in popularity, active-wear commanding some of the best pricing premiums in the apparel space, and athletic garb increasingly worn for purposes other than exercise, the formerly niche market has become mainstream, and competition is flooding the space.
"Add to that a diverse array of company-specific challenges including supply-chain management, brand image, and management troubles, and we have the perfect storm pressuring stock performance."
Lululemon suffered a huge blow in March of last year when it had to recall 17% of its pants for being too sheer. Since then, its market value has shrunk from $10 billion to $6 billion.
Spelling more trouble for the company, customer reviews for Lululemon's basic yoga pant — the "Groove" — have turned increasingly sour. On Lululemon's website, the pants have three stars out of five based on hundreds of customer reviews. Athleta's pants, by comparison, have a customer rating of 4.3 stars out of five.
In the most recent reviews for the Lululemon pants, a majority of customers complained that the material feels cheaper than the brand's original yoga pant, and several said their pants are see-through and have begun pilling.
"They are SEE-THROUGH. As in I could see my purple underwear through them perfectly. And no I wasn't wearing a small size and no I would not suggest sizing up because then these pants would fall off," wrote one reviewer. "For the money one pays for these pants, you'd expect better quality!"
Another reviewer lamented, "They are so comfy but are pilling like crazy," while a third said, "I found they stretched out in the waist and hips and crotch area to the point they're unwearable in public."
A fourth customer wrote, "They are thinner than my last pair, have pilled all in the thighs and stretch out when I wear them! ...I feel like I wasted my money."
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Unfortunately for those unhappy customers, the retailer doesn't accept any returns after two weeks, and only accepts merchandise with original tags that has never been worn. Athleta, on the other hand, accepts returns at any time, even if the items have been worn.
"With so many options out there, we think Lululemon will be forced to keep its prices in a competitive range or to justify higher prices with a technically differentiated product," Weishaar wrote.
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