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Nike and Lululemon Slug It Out in Battleground London

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Sportswear and “athleisurewear” firms target European cities

As discussed in Part 1 of this series, Nike (NKE) recently opened its first women’s-only store in London, United Kingdom. Lululemon Athletica (LULU) already has two stores in London, with a third one slated to open soon. One of them is located on King’s Road, just a short walk away from Nike’s new store. The difference is LULU’s store caters to both men and women.

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Lululemon has big plans in London

LULU also opened a flagship store in Covent Garden last year, sized at over 3,000 square feet. Covent Garden’s quirky mixture of the modern and the old fashioned resonates with LULU’s own image.

The Niketown store on Oxford Street caters to both men and women. It’s a complete sports destination, though the space allotted for women’s products is more limited.

Number two US sportswear brand, Under Armour (UA), also has a presence in London, as has Nike’s global rival, Adidas (ADDYY). But while UA retails through distributors such as John Lewis, ADDYY has a direct retail presence in locations like Oxford Street and Foubert’s Place.

Nike’s and LULU’s other competitors include local brands such as Sweaty Betty and PINK from L Brands (LB). Both sell via their own stores and online.

Value-added services

Lululemon offers yoga classes and run clubs at its London stores. The company’s also known for hosting occasional events in certain cities in Europe, even in locations where its retail presence is limited. LULU operates showrooms a few days a week in these locations. It’s one way to extend feelers and get a sense of local demand.

The new Nike store has also been styled to provide additional services, including the Nike+ Run Club and Nike+ Training Club. These are important value-added services that are likely to result in incremental revenue opportunities.

Nike is featured among the elite 30-stock Dow Jones Industrial Average Index. The SPDR Dow Jones Industrial Average ETF (DIA) has 3.8% of its assets invested in Nike.

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