Before Lululemon Athletica’s (LULU) earnings release, all kinds of theories were floated as to why it was a good time to buy the yoga-wear retailer’s beaten down shares, including the international opportunity, its new products and even the extent of the beatdown. Those all proved wrong after Lululemon’s terrible results, but now there’s another reason for hope: Someone might want to buy Lululemon.
ZUMAPRESS.com At least that’s what was suggested in an article in Bloomberg today, which noted that VFC (VFC), among others, could be interested in buying Lululemon. Sterne Agee’s Sam Poser and Ben Shamsian aren’t buying it:
We continue to assert that the value of the LULU brand comes from the combination of great service and great product. We believe that an acquisition at this time would only further hurt the in-store experience and do more damage to the LULU brand.
An acquisition of LULU by Adidas or VFC would hurt those brands as well as hurt LULU in the long run. LULU must fix its own problems.
We do not believe that throwing M&A theories into the marketplace, without detailed thesis is responsible.
Shares of Lululemon have gained 2.9% to $39,.84 today at 11:43 a.m., while VFC Corp. is up 0.1% at $61.87.
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