LULU Update

JJ was made aware of LULU by a couple of MILF's that came into the restaurant last night. When they bought their LULU gear, the store was packed and they waited close to 30 minutes just to pay. Their IPO was released earlier this year. At that time, 87% of their net revenue was derived from sales of their products in Canada. 11.7% came from the U.S.

There is a store in Boulder and Denver. We're going to need CJ to go on a field trip.

LULU makes high-end yoga apparel mostly geared towards women. Pops, don't worry, there is men's gear. Their clothes have features such as moisture wicking, odor control, and a seaweed compound that releases vitamins and minerals directly into the skin.

For the three months ended July 31, 2007:

• Net revenue increased 80% to $58.7 million compared to $32.5 million for the second quarter of fiscal 2006. Net revenue from corporate-owned stores increased 98% to $53.1 million compared to $26.8 million for the second quarter of fiscal 2006, with comparable store sales growth of 30%.
• Gross profit as a percentage of net revenue increased 430 basis points to approximately 53% of net revenue from 49% of net revenue in the second quarter of fiscal 2006.
• Income from operations increased 202% to $9.8 million, or 17% of revenues, compared to $3.2 million, or 10% of revenues, in the second quarter of fiscal 2006.

LULU has 37 stores in Canada with 2 opening soon. In the U.S. there are 34 stores with 14 opening soon. One is actually coming soon in Jacksonville in the same complex where Mitchell's is opening. LULU believes there is room for growth of up to 300-350 stores in the U.S.

LULU provides a superior product that people love. This will be bought next week.