Lululemon to shut 40 ivivva stores following Q1 sales growth slow

London - Premium activewear retailer Lululemon Athletica Inc is set to close 40 of 55 ivivva stores for girls and convert half of the remaining stores into Lululemon branded stores.

The Vancouver-based company aims to complete the most of the ivivva store closures, which sell girls activewear, by the end of its third quarter this October. Lululemon also aims to close down all of its ivivva branded showrooms and other temporary locations and streamline its corporate infrastructure.

Lululemon restructure business by shuttering 40 ivivva stores

The move is part of the company's restructuring plan to help optimize its business which has been struggling lately, according to Laurent Potdevin, CEO of Lululemon.The company plans on shifting the majority of ivivva business online, with a select number of stores in key locations across North America.

Lululemon announced the impending store closures Thursday evening, together with the financial results for the first quarter ended April 30, 2017, which saw revenue increase 5 percent year on year to 520 million USD. Results for Q1 2017 surpassed analysts expectation and saw company shares increase 15 percent after hours.

Total comparable sales decreased 1 percent during its Q1 2017 and gross profit was 256.9 million USD, a 7 percent increase from the first quarter of 2016. Adjusted income from operations was 63.2 million USD, an increase of 10 percent. Ahead of its impending ivivva store closures, Lululemon is recognizing pre-tax costs of 17.7 million USD in the first quarter of fiscal 2017.

"I'm excited to see the positive trends that materialized late in Q1 continuing into Q2. Our current outlook for the remainder of 2017 is strong, and I'm energized by the growth strategies taking shape," said Laurent Potdevin, CEO, Lululemon, in a statement. "I'm also confident in our plans to restructure ivivva and believe they are the best means to optimize this part of the business."

"From our cadence of product innovation to our enhanced digital experience, and first-ever global brand campaign, we have never felt more deeply connected to our guest or better positioned to expand our collective. We remain laser focused on owning our position as the global brand defining an active, mindful lifestyle."

Photos: Courtesy of Lululemon