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Lululemon's (LULU) New Board Member Will Help Lay Groundwork for International Expansion - Analyst

April 26, 2012 3:14 PM EDT
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Price: $393.82 +1.12%

Rating Summary:
    32 Buy, 11 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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A Board of Director appointment usually doesn't get much buzz. This held true with Lululemon's (NASDAQ: LULU) appointment of Jerry Stritzke late Wednesday. But not so fast says one analyst.

Analyst Taposh Bari at Jefferies said the appointment of Mr. Stritzke, the COO of Coach (NYSE: COH) "adds another layer of depth to an all-star leadership team." Bari said Stritzke experience with international brands' will help as Lululemon lay the groundwork for international expansion.

"Lululemon is accumulating one of, if not the best, boards in the industry," Bari contends. Stritzke will be the 10th director and follows the recent appointments of Emily White, Senior Director Local and Mobile Partnerships at Facebook and Jacques Levy, former Chairman and CEO at Sephora. The other Directors have pedigrees that are equally impressive.

The appointment of Stritzke and comments from Chairman Chip Wilson in the press release "serves as yet another signal supporting Lululemon's international aspirations," Bari states.

In early April, Lululemon unveiled a list of 10 target markets in Europe and Asia that included UK, Hong Kong, Germany, Singapore, Japan, Korea and Switzerland. Bari thinks the company could open its first European store in London as soon as Holiday 2013.

The company said it thinks international can one day compare in size to North America.

"With the goal clear, it now comes down to execution," the analyst said. "We think the company has the right people in place and look forward to seeing how the ecommerce rollouts progress later this year."

Despite all the hype on an international expansion, Bari is maintaining a Hold rating and $83 price target on the stock.

For an analyst ratings summary and ratings history on Lululemon Athletica Inc. click here. For more ratings news on Lululemon Athletica Inc. click here.

Shares of Lululemon Athletica Inc. closed at $71.93 yesterday.


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