2 Things Gap's Athleta Has Over Lululemon

Gap (GPS -0.45%) noted 2013 as the "breakout year" for its women's athletic apparel and accessories brand Athleta. The number of Athleta store locations increased by 85% in 2013 as the company opened 30 new stores and ended the year with 65 stores in 25 states, as well as the District of Columbia. While Gap plans to have about 100 Athleta stores by the end of fiscal 2014, it will still trail yoga-wear retailer and competitor lululemon athletica (LULU -0.11%), which reported 263 stores as of May 4, 2014.  Even though it doesn't come close to the bricks-and-mortar store count of lululemon, Athleta has three things that lululemon doesn't which drive customers through its doors and to its registers.

Promotions and sales
As many yoga enthusiasts have discovered, Athleta's apparel is priced competitively compared to lululemon's active-wear with items priced about 7% below those at lululemon. While this may or may not matter to the average shopper, Athleta takes it one step further by offering store promotions from time to time. Shoppers do not need a code or coupon to benefit from the store's discounts. While the promotions vary based on the season, store inventory, and trends in foot traffic, Athleta oftentimes offers customers 25% off of all full-priced items, which means that a pair of $80 yoga pants will actually cost $60 without including taxes.

These promotions drive customers in the doors and push them to purchase more as a result, and some customers would even argue that Athleta has higher product quality than lululemon. Unlike Athleta, lululemon never runs a promotion or sale; instead, over time, it marks down certain products as "Last Chance" when only a few sizes are left in a particular style in order to move product. For customers who want yoga apparel with a lower price tag, Athleta is the place to go because you won't get a low price tag at lululemon -- plain and simple.

Shoes
Customers may be running to both yoga-wear retailers for their stylish athletic-wear and gear, but only Athleta offers a footwear collection. Athleta knows that women love shopping for shoes. So why not shop for the perfect shoe to complement any type of workout while shopping for performance apparel? Just go online and shop Athleta's wide selection of footwear in the following five categories: performance footwear, sneakers, boots, sandals, and flats. The chart below depicts the footwear categories along with their specific details.

"Performance footwear" designates a particular sport and the appropriate shoes that would best fit that activity. For instance, Athleta has specific shoe styles for running, the gym, golf & tennis, hiking, and swimming. In addition, customers can play around with the color of the shoes based on the color options available. Clearly, Athleta has footwear down pat.

Foolish takeaway
Did you ever think Athleta had so much going for it despite having lululemon as its competition? Foolish investors should keep an eye on Athleta as it attempts to open 30 new stores over the current fiscal year. Athleta is certainly pulling out all the stops to pull women from lululemon's stores. Foolish investors would be wise to follow Gap's progress with its Athleta brand and decide whether or not it would fit in their portfolios.