Lulus, a clothing line targeting Millennials and Gen Z customers, has announced two key executive hires at the company that has seen profits and revenues decline recently.
Patrick Buchanan, who previously was the vice president of marketing at Good American, the Los Angeles denim brand founded by Emma Grede and Khloé Kardashian, has been named senior vice president of brand marketing at Lulus. The company said he will lead the charge in establishing the brand’s identity, shaping market perception and translating creative concepts into impactful campaigns.
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In addition, Abbygail Reyes was hired as vice president of communications. Before, she was head of product and business communications for Nextdoor, a San Francisco-based social media network connecting local communities. She will oversee shaping Lulus’ organizational storytelling and public perception as well as connecting the brand with the global fashion community.
“Core to Lulus is the desire to evolve. During this pivotal time for the company, we recognized the need to onboard leadership that can bring unique perspectives and will undoubtedly be catalysts for growth,” said Lulus’ chief executive officer Crystal Landsem.
Lulus was founded in 1996 by Colleen Winter and her mother as a brick-and-mortar store for vintage apparel in Chico, Calif., before transitioning fully to an online business in 2008. It carries an array of ready-to-wear categories as well as bridal fashion sold at affordable prices.
In late 2021, the company, formally known as Lulu’s Fashion Lounge Holdings, went public, trading on the Nasdaq. In 2022, during its first full year as a publicly traded company, net revenues grew 17 percent to $440 million compared to the previous years. That same year, net income advanced 82 percent to $3.7 million.
This year, it has been harder to maintain that revenue growth. In its second-quarter earnings results released on Aug. 8, Lulus saw net revenues drop 19 percent to $106.1 million, compared to the same period last year. The online company registered a net loss of $2.6 million compared to a profit of $6 million from 2021’s second quarter.
For the first six months of this year, net revenues totaled $197 million compared to $243.4 million last year while the clothing company saw a net loss of $8.2 million, compared to a net income during the first half of last year of $8 million.
“We experienced headwinds related to choppiness in consumer demand, macroeconomic uncertainties and elevated return rates that led to year-over-year net revenue declines,” Landsem noted at the time the financial results were reported. “Top-line demand fell short of our expectations and return rates increased by more than anticipated.”
With a dip in revenues, the CEO said the company was accelerating its efforts to adapt to changing consumer behaviors and meet customers where they shop. With that in mind, Lulus signed a short-term lease in July for a Melrose Avenue store in Los Angeles, which should be opening soon.
In its full-year guidance for 2023, the womenswear line expects net revenues to decline between 15 percent and 19 percent over last year, totaling anywhere between $355 million and $375 million.
Adjusted earnings before interest, taxes, depreciation and amortization is forecast to be between $5 million and $10 million, a decline of between 83 percent to 66 percent compared to 2022.
Adding to its headwinds, interest expenses are anticipated to be approximately $1.6 million, a 45 percent increase compared to 2022, due to higher interest rates offsetting lower expected revolver balances.
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