On a Saturday morning, you can spot a certain type of customer at a Lululemon store: the person standing close to the counter, waiting to inquire about the trade-in, while carrying a folded stack of older leggings in a tote bag. They’re not here to indulge. They are here to trade. Furthermore, the company’s long-term strategy is benefiting more from that minor, nearly unnoticeable exchange than from the majority of its most recent product launches.
The core of the entire operation is the Like New program, which was extended nationally on Earth Day in 2022 following a pilot in Texas and California. When customers bring in gently used Lululemon merchandise, they are given an e-gift card according to the category—five dollars for a top, ten dollars for leggings or a hoodie, for example—and the merchandise enters a parallel inventory stream that is virtually entirely under the brand’s control. Trove, a Bay Area recommerce startup that has previously run comparable programs for Patagonia, Levi’s, and REI, handles the cleaning, sorting, and grading. Refurbished and inspected items reappear at about half retail on a dedicated online storefront.
It’s easy to interpret this as a sustainability gesture—the kind of thing that all retailers feel compelled to do these days. What’s happening is underestimated in that reading. For Lululemon, resale is subtly evolving into a channel for acquiring new customers. Nearly half of Like New customers, according to executives, are brand-new. These individuals are unable or unwilling to spend $128 on a pair of Align pants. The math of brand loyalty begins to work in Lululemon’s favor once they own one, even if it is only slightly used.
The business seems to have discovered this the hard way. For many years, sellers built entire small businesses around Lululemon’s inventory, making it one of the most popular brands on Poshmark, ThredUp, and eBay. The company did not see a single one of its products as they were repeatedly transferred. Reclaiming territory was more important than reinvention when it came to bringing that traffic in-house.
The one thing that could have killed the idea was the hygienic issue—the so-called “ick” factor of used exercise equipment. Strict grading, expert sanitization, and a presentation that resembles the main website were Lululemon’s direct responses. Items that don’t pass inspection are recycled or given away. The end product feels more like a certified pre-owned program than a thrift store, the clothing equivalent of a used Lexus that has undergone a 200-point inspection.
Like New’s profits are put back into recycling and circular design projects, including longer-term fiber-to-fiber commitments. It’s another matter entirely whether the 2030 goal is achieved. However, the promise itself provides the program with a moral framework that rivals haven’t quite matched.
The lack of friction is what allows the structure to function. The regular store houses the trade-in counter. The resale website resembles the primary website. Nothing seems out of place. As this develops, it’s difficult to ignore how uncommon that degree of vertical control is in fashion retail at the moment. Nike has experimented with it. Patagonia was the first to do it. However, Lululemon has managed to pull it off with unusual ease, possibly because its product is so emotionally connected to its customer base. It is also reaping the kind of quiet, compounding revenue that doesn’t show up in a single earnings call but tends to show up everywhere else.
