Lululemon reaches exclusive deal to make Canada's official Olympic and Paralympic gear through 2028

Lululemon will be the exclusive Olympics outfitter of Team Canada until at least the 2028 Games.

Under a deal announced Thursday with the the Canadian Olympic Committee and Canadian Paralympic Committee, the Vancouver-based athleisure giant will be the exclusive supplier of Olympic-branded athletic apparel for the next four Olympic Games:

• The Winter Games in Beijing in 2022.

• The Summer Games in Paris in 2024.

• The Winter Games in Milan in 2026.

• The Summer Games set for Los Angeles in 2028.

CBC holds Canadian broadcast rights for the Olympic Games through 2024.

The deal means all members of Team Canada — from athletes and coaches to support staff — will be fully outfitted in Lululemon gear during both the opening and closing ceremonies, at media appearances and in the athlete's village.

The retailer's CEO, Calvin McDonald, said he "could not be prouder" of the agreement.

WATCH | Lululemon to outfit Team Canada for next 4 Olympiads:

"Supporting these incredible athletes as they prepare to compete on the world's largest sporting stage and achieve their goals is a privilege," he said in a news release. "Through this partnership, all of us at Lululemon are honoured to play our part to inspire, unite and transform the world through sport and share in this excitement alongside all of Canada."

The company says 10 per cent of the proceeds of all sales will go toward a fund to support athletes. Some of the gear is being released on Thursday, while the full athlete kit — along with other items for consumers — is to come out next month.

Karen O'Neill, CEO of the Canadian Paralympic Committee, said she was "delighted" by the pact.

"Through the work being done to ensure accessible and inclusive clothing, this is a partnership that will provide high-quality and stylish gear for Team Canada and also seek to promote and support sport for people of all abilities," she said. "Lululemon, like us, believes in the power of sport to create positive change and we look forward to working together throughout the partnership to do just that."

The deal with Lululemon comes after a previous one with HBC had expired. The parent company of The Bay owned the rights to Team Canada's Olympic duds for every Games dating back to 2006 in Turin, Italy. Prior to that, Roots was Canada's Olympic outfitter.

'Game-changer' for company

Independent retail analyst Bruce Winder, based in Toronto, said the move is a "game-changer" for Lululemon and makes perfect sense given the company's strategic direction.

Lululemon has seen booming sales during the pandemic as millions of office workers found themselves working from home and in need of comfortable but stylish clothing. Last week, the company said it took in $1.5 billion in revenue in the second quarter of 2021 — almost twice what it made in the same period two years ago in 2019.

Shares in the company plummeted in March 2020 — along with most other stocks at the start of the pandemic — bottoming out at less than $140 a share. But since then its stock has roughly tripled, changing hands at more than $430 apiece this week.

Lululemon shares have soared in the pandemic

A popular brand in many women's wardrobes, Lululemon — which was founded in 1998 in Vancouver as a retailer of yoga wear — has recently tried to diversify its customer base by moving aggressively into menswear — which is why Winder says the Olympics deal makes so much sense for the company.

"They've had considerable more strength on the female side ... [so] this definitely opens them up," he said in an interview. "It's a great advertisement to show that they are in the menswear market as well."

Winder says it's also a savvy move because it reinforces Lululemon as a high-performance brand for people who live active lifestyles.

"It reinforces the technical nature of Lululemon, which is important because there's a lot of copycats now," he said. "You can buy yoga wear anywhere, but the technical nature of Lululemon is what differentiates it and the brand cachet, and this does both."

Price tag needs to 'make sense'

Financial terms were not disclosed, but Winder says it's money well spent for the brand, regardless of the cost.

Others say the payoff depends on the price Lululemon paid.

David Ian Gray, founder and principal of Vancouver consultancy DIG360, says flashy sponsorships can work or not, depending on the company and brand.

"The company feels great about the profile, and they may have worked a last-minute discount given the plummet in eyeballs on the Tokyo Games," he said in an email to CBC News. "However, I would like to know the [price tag]."

Gray says being associated with the Olympics is not as important for the company's strategic direction as is the positioning beyond yoga to athletics, performance and healthy living.

"It reinforces the fact they really drove the whole athleisure category," he said. "Assuming the dollars make sense, the idea of landing this for Lulu makes sense."