FEATURE-Once unique, Lululemon faces rivals on all sides

Fri Dec 7, 2012 7:00am EST
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* Vancouver-based retailer inspires enduring fashion trend

* Copycats suggest Lulu's niche has entered mainstream

* Lulu has loyal following but may be vulnerable on price

* Trendy upstart chains include Lolë, Lorna Jane

* Gap Inc's Athleta targets 50 U.S. stores by end of 2013

By Allison Martell

TORONTO, Dec 7 (Reuters) - When Lululemon Athletica Inc opened its first U.S. shop in 2003, its form-fitting yoga pants, free classes and Pacific Northwest vibe were a revelation to its new American customers. They had never seen another retailer like it.

But time has caught up with the Vancouver-based retailer. Lululemon, closely watched by investors because of its meteoric rise, now faces a cluster of competitors whose stores and products bear a striking resemblance to its own.

Montreal-based Lolë, Gap Inc's Athleta and others are expanding aggressively in the United States. They could threaten Lulu's stellar growth and robust brand, especially by competing on price.   Continued...