How Lululemon Dominates High-End Active Wear

A brand that has grown to operate 574 physical stores internationally and also transitioned successfully to online selling in a little over two decades is the Canadian multinational athletic apparel retailer known as Lululemon Athletica. Headquartered in British Columbia and incorporated in Delaware, United States. Lululemon Athletica, Inc., began by selling yoga wear and over the years expanded to include athletic wear, lifestyle apparel, accessories, and personal care products.

History
Products Sold by Lululemon
How Lululemon Dominates Active Wear
Present & Future

History

The company, Lululemon Athletica Inc., was founded in 1998 by Chip Wilson in Vancouver and it opened the doors of its first standalone store in November 2000. The idea behind the brand name was to have many ‘L’s’ to make it sound Western to Japanese buyers.

In July 2007, Lululemon raised USD 327.6 million by selling 18.2 million shares through its Initial Public Offering (IPO). The company was growing fast under the leadership of Chip Wilson who resigned from his post of Chairman in December 2013 and announced that Laurent Potdevin, the President of TOMS Shoes would take over as the CEO. In the year 2015, Chip Wilson also resigned from the board and was replaced by Michael Casey, former Lead Director of the board.

Under Potdevin’s leadership, Lululemon opened its first flagship store in Europe at Covent Garden, London in 2014. He led the company for fourteen years before resigning in 2018, both as the CEO and board member due to allegations of misconduct.

It was in the year 2019 that Lululemon announced an investment in MIRROR. MIRROR was a fitness app selling interactive mirrors with cameras and speakers for at-home exercise regimes. This was done with the idea of creating new content for the device beginning with meditation classes. It was in March 2020 that the Covid-19 pandemic brought the world to a standstill. This gave rise to the increasing trend of people conducting virtual workouts at home in lieu of going to the gym due to the pandemic-related restrictions. Capitalizing on this, Lululemon went ahead and announced a deal to purchase MIRROR for a total of USD 500 million in June 2020.

Lululemon has incorporated elements of Landmark Forum into its leadership and developmental training since its inception. A source from within the company has clarified that it largely hires its managers internally. The store managers are then, accountable and responsible for the store’s layout, color coordination, and community involvement.

Products Sold by Lululemon

Lululemon’s product journey began with yoga pants. It was a product that the company invented. This was followed by shorts, sweaters, jackets, and undergarments along with hair accessories, bags, yoga mats, water bottles, and personal care products such as deodorant and dry shampoo. In the year 2005, the company trademarked its original fabric named Luon and then went on to produce several different types of fabrics that included compression and moisture-wicking designs.

Three years ago, in 2019, Lululemon also launched a luxury streetwear brand named Lab and stocked it in a few of its stores. It also announced its intention of doubling its business in the men’s category and competing against established brands like Nike and Under Armour.

Lululemon Athletica leverages social media sites that include Facebook, Twitter, and Instagram as their main marketing channels for its products. It also advertises through fitness instructors on commission-based incentive programs.

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How Lululemon Dominates Active Wear

Chip Wilson began his entrepreneurial journey with his first venture named Westbeach, a small booth that sold BBQ shorts, sweatpants, skating wrap shorts, and snowboarding and surfing items. Westbeach witnessed success throughout the 80s till 1995 when it collapsed under supply chain and distribution issues.

While considering other opportunities, he joined a yoga class at a local studio and realized that the available yoga apparel had fitting and performance issues. He once said in an interview –

From my first yoga class, I knew exactly the fabric I wanted to use to make my yoga apparel. I had used a version of my dream fabric as the first layer under snowboard clothing for the emerging fourteen to eighteen-year-old female snowboard market.

With meticulous attention to the details of cut, fabric, flaps, and zippers, the brand was a runaway success. Lululemon’s apparel store also functioned as a yoga studio at night gaining even more popularity.

Much of the brand’s success was also attributed to Wilson’s philosophy of ‘personal selling’. He hired sales staff that represented the Super Girl persona and designed a strategic selling script that, paired with the in-store design layout helped Lululemon reach the same sales volumes of Apple and Tiffany. As the sales volumes grew, so did the number of stores which was later amplified by a successful IPO.

Although the company saw a brief downturn between 2013 and 2017, a change in the company’s leadership signaled a new era as the brand transitioned to e-commerce in 2018.

Present & Future

Lululemon has grown since those early days and it posted a 29% soaring Y-O-Y 2022 second-quarter revenue. It also recorded a three-year CAGR increase of 25% for women and 30% for men. In 2021, the company also introduced women’s footwear products in its product catalog.

Lululemon is forging ahead with an ambitious five-year plan that aims to double its digital sales and quadruple its international revenue by the year 2026. Their goal is based on three strategic action points – innovation, guest experience, and international expansion.

Conclusion

Lululemon’s journey has been far from smooth. In 2007, it fell victim to its own false marketing claims that its Vitesea line of fabric was made from seaweed, through a test conducted by independent journalists. Its polarising founder Chip Wilson landed in trouble with the media more than once through his indiscreet and, sometimes, racial comments. However, through it all, the brand has continued to grow and has a very optimistic view for the future.

FAQs

Who founded Lululemon?

The company, Lululemon Athletica Inc., was founded in 1998 by Chip Wilson in Vancouver.

What are the products sold by Lululemon?

Lululemon’s product journey began with yoga pants. It was a product that the company invented. This was followed by shorts, sweaters, jackets, and undergarments along with hair accessories, bags, yoga mats, water bottles, and personal care products such as deodorant and dry shampoo.