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Lululemon's loyal customers have been incredulous about the brand's prices lately — $298 for running crops — but it turns out this actually might be the best time to shop for bargains at Lulu. That's what some analysts are saying, according to Quartz, and the brand's propensity for discounting lately in addition to the crowded athleisure market might be why Lululemon's shares are slipping.
Lululemon's stores are displaying "significantly higher clearance levels," according to a report by FFBR & Co. analyst Susan Anderson, who just downgraded her rating to "underperform" from "market perform."
She's estimating that the number of clearance racks at Lululemon stores has nearly doubled since last year. The markdowns of items are deeper as well, Anderson suggests, and there's a similar phenomena happening online too. The brand has had a reputation for not relying heavily on promotions, which is why Lulu's rare online warehouse sales are such a big deal.
Of those shopping at Lululemon, Anderson's online and in-store checks indicate that most people are buying clearance items. "Given increasing competition in women activewear and a competitive men’s market, we think that LULU may not be able to claw back margin with higher selling prices on product," she wrote. But for bargain shoppers, now might be a good time to scour Lululemon's "We Made Too Much" section.