Carhartt, lululemon, and Christian Louboutin look to brand extensions to fuel growth

The trend: Several hot brands, including Carhartt, lululemon, and Christian Louboutin, are expanding into new categories to accelerate their up-and-to-the-right growth trajectories.

• Workwear brand Carhartt is rolling out a new line of women’s wear, including T-shirts and sweatshirts made with Tencel, a soft, lightweight semi-synthetic fiber, per Retail Dive. The line is part of the company’s strategy to grow its women’s segment from about 15% of the business to about 30%.
• Athletic apparel retailer lululemon will debut its first men’s footwear line next week when it launches its “cityverse” casual sneaker. The push into men’s footwear is a key pillar in the company’s goal to double its men’s business and grow its revenues to $12.5 billion by 2026.
• High-end fashion brand Christian Louboutin partnered with Italian eyewear manufacturer Marcolin to enter the eyewear market, per Women’s Wear Daily. The move, which dovetails with the brand moving into beauty in 2014 and its launch of pet and kids categories in 2022, is the latest step in its bid to become a “complete lifestyle luxury accessories player,” CEO Alexis Mourot told WWD.

Does it make sense? Moving into a new category is an enticing lever to pull when a brand is looking to spur rapid growth—but actually generating that growth often requires significant investments to build awareness and deliver a desirable product.

• For example, lululemon’s brand awareness among men is only around 13% in the US, 12% in Australia, and single digits everywhere else outside of North America, said CEO Calvin McDonald, during the company’s earning call in December. To drive those numbers up, the retailer is investing in targeted TV campaigns and other media buys.
• It’s also critical to find a niche that aligns with the brand and doesn’t distract from the company’s focus. The product graveyard is full of initiatives that fell flat because they weren’t aligned with the company’s core competency.
• That’s a lesson that both Peloton and lululemon know well. Peloton sought to develop an apparel line to compete with companies like Nike and lululemon, and lululemon pushed into connected fitness with its $500 million acquisition of Mirror. After several years of experiencing the challenges of managing their non-core initiatives, the companies reached a partnership that brought Peloton content to lululemon’s exercise app and made lululemon Peloton’s primary athletic apparel partner.

The big takeaway: Brands need to tread carefully when moving into a new category.

• While it’s tempting to see potential in expanding their total addressable markets, they need to recognize that competing with established players requires significant investments in paid and owned media.