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Lululemon Athletica

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lululemon athletica inc.
Company typePublic
IndustryRetail
Founded1998; 26 years ago (1998)
FounderChip Wilson
Headquarters
Vancouver, British Columbia
,
Canada[1]
Number of locations
460 (as of September 2019)[2]
Area served
North America, Asia, Europe, Oceania
Key people
  • Calvin McDonald (CEO)(August 20, 2018-)
  • Glenn Murphy (Chairman)
  • Meghan Frank
    (Interim Co- CFO)[3]
  • Alex Grieve
    (Interim Co- CFO)[3]
  • Celeste Burgoyne
    (EVP, Americas)
  • Sun Choe
    (CPO)
ProductsAthletic apparel
BrandsLab
RevenueIncrease US$4 billion (2019)[4]
Increase US$889.1 million (2019)[4]
Increase US$645.59 million (2019)[4]
Total assetsIncrease US$3.28 billion (2019)[4]
Total equityIncrease US$1.95 billion (2019)[4]
Number of employees
15,700 (February 2019)[5]
DivisionsLululemon Athletica
OQOQO
Ivivva Athletica
Websiteshop.lululemon.com

Lululemon Athletica (/ˌluːluːˈlɛmɪn/), styled as lululemon athletica,[1] is a Canadian athletic apparel retailer headquartered in Vancouver, British Columbia. Founded in 1998 as a retailer of yoga pants and other yoga wear, Lululemon has since expanded to sell its products internationally in 460 stores as well as online. The company has expanded to sell a variety of athletic wear, including performance shirts, shorts, and pants, as well as lifestyle apparel and yoga accessories.

History

The Lululemon Athletica store in Westport, Connecticut
Lululemon Athletica at The Promenade (Toronto, Canada)

lululemon was founded in 1998 by Chip Wilson in Vancouver, British Columbia,[6] and sold its first pair of yoga pants that year.[7] Wilson created the name to have many L's so that it would sound western to Japanese buyers, who often have difficulty pronouncing the letter.[8]

The company's initial public offering was in July 2007, raising $327.6 million by selling 18.2 million shares.[9][10] Christine Day, a former co-president of Starbucks, became chief executive officer in 2008.[9]

In 2013, the company made its third consecutive appearance on Fortune's Fastest-Growing Companies list.[9] In December 2013, founder Chip Wilson announced his resignation as chairman, and that the president of TOMS Shoes, Laurent Potdevin, would become CEO.[11]

In 2014, lululemon opened its first store in Europe, a flagship shop in Covent Garden, London.[12] In February 2015, Wilson announced that he was resigning from the board,[13][14] and that Michael Casey, former lead director of the board, would replace him.[15] In 2018, Laurent Potdevin resigned as CEO and from the company's board due to misconduct.[16][17]

In 2019, lululemon announced an investment in Mirror, a fitness startup that sells an interactive mirror with a camera and speakers for at-home workouts. The companies planned to create new content for the device, starting with meditation classes.[18] In June 2020, Lululemon announced a $500 million deal to purchase Mirror, capitalizing on a growing trend of people conducting virtual workouts at home instead of going to a gym due to the COVID-19 pandemic.[19]

Management

From its founding through 2015, lululemon incorporated elements of Landmark Forum into its leadership and development training.[20] According to a company source, seventy percent of managers are hired internally.[21] Store managers are responsible for their store's layout, color coordination, and community involvement.[21]

Products

Lululemon sells athletic wear including tops, yoga pants, shorts, sweaters, jackets and undergarments,[7] as well as hair accessories, bags, yoga mats and water bottles.[22] Lululemon trademarked its original fabric, Luon, which included a higher-than-average amount of nylon microfiber, in 2005.[7] Since then, the company has produced several different types of fabrics, including compression and moisture-wicking designs.[7]

In 2017, Lululemon and Athletic Propulsion Labs began selling women's and men's shoes in 23 stores across North America.[23] In 2019, the company launched a luxury streetwear brand called Lab in a few of its stores.[24]

Lululemon maintains a research and development lab, "Whitespace", within its headquarters. It has around 50 employees including scientists and physiologists.[7]

Marketing

Originally known for women's yoga apparel, by 2019 Lululemon had grown by acquiring more male customers, adapting its product and marketing strategies accordingly, and plans to increase awareness of the brand among men.[25] The company has been stated to use "holistic guerrilla marketing", aiming to make customers feel that by wearing Lululemon clothing they are part of a larger community.[26] Lululemon uses social media including Facebook, Twitter and Instagram as one of its main methods of marketing the company and its products.[27]

Controversies

False advertising

In November 2007, The New York Times reported that Lululemon made false claims about its Vitasea clothing product; the firm had claimed that the clothing, made from seaweed, provided "anti-inflammatory, antibacterial, hydrating and detoxifying benefits"[28] but laboratory tests failed to find significant differences in mineral levels between ordinary T-shirt cotton and Vitasea fabric.[28] Lululemon was subsequently forced to remove all health claims from its seaweed-based products marketed in Canada, following a demand from a Canadian oversight agency, the Competition Bureau of Canada.[29]

Product quality

In 2013, some customers complained that the clothing was of poor quality, with some items being "too sheer", having holes appear, and falling apart after a few uses.[30][31] In December 2010, Lululemon recalled some of the store's reusable bags that were made in China from polypropylene, based on reports of high levels of lead.[32] In 2013, Lululemon recalled its black yoga pants that were unintentionally transparent and "too thin";[33][34] the recall, which amounted to approximately 17% of all women's pants sold in its stores, impacted its financial results.[35] The resulting financial loss and damage to the brand led to the forced departure of the company's Chief Product Officer, Sheree Waterson,[36][9] and of its CEO, Christine Day.[9][37]

Lululemon Athletica pop-up shop in Traverse City, Michigan

Founder's statements

Founder Chip Wilson has made numerous controversial statements that have been widely derided as offensive. In a 2004 interview, Wilson mocked Japanese pronunciation of the company's name.[38] In 2013 he said that the company did not make clothes for plus-size women because it was too costly.[39] In an effort to explain away excessive pilling in the brand's clothing, he blamed some customers for wearing Lululemon's clothes improperly or for having body shapes inconsistent with his clothes.[40] In an interview for Bloomberg TV in 2013, he stated that some women's bodies were unsuitable for the brand's clothing.[40] Time called the remarks "fat shaming".[41]

Comments such as these reportedly led to Wilson's resignation as chairman.[42] In June 2016, Wilson published an open letter to shareholders stating that the company had "lost its way" and given up market share to Nike and Under Armour, after he was denied the opportunity to speak at the company's annual meetings.[43][44] Since then, Wilson has used his website "Elevate Lululemon" to criticize the brand and business.[45][46]

In 2012, Lululemon filed a lawsuit against Calvin Klein and supplier G-III Apparel Group for infringement of three of its design patents for yoga pants.[47] The lawsuit was somewhat unusual as it involved a designer seeking to assert intellectual property protection in clothing through patent rights. The case was settled out of court the same year.[48]

See also

References

  1. ^ a b "Form 10-K — lululemon athletica inc". U.S. Securities and Exchange Commission. Retrieved 2020-03-12.
  2. ^ Thomas, Lauren (5 September 2019). "Lululemon shares rise as growth in men's sales drives earnings beat". CNBC. Retrieved 13 September 2019.
  3. ^ a b Minaya, Ezequiel. "Lululemon CFO Latest Finance Chief To Exit Amid COVID-19 Upheaval". Forbes.
  4. ^ a b c d e "2019 Accounts". Retrieved 20 October 2020.
  5. ^ "2018 Annual Report". Retrieved 6 July 2019.
  6. ^ Rob Walker, July 21, 2009, New York Times, Marketing Pose, Retrieved , "...it’s no surprise that some yoga devotees have zeroed in on it as an annoying phony-baloney symbol. Elaine Lipson, a writer and editor in Boulder, Colo., who ..."
  7. ^ a b c d e Jr., Kim Bhasin and Gerald Porter. "The rise of lululemon: How America became a nation of yoga pants". chicagotribune.com. Retrieved 2018-11-05.
  8. ^ Edwards, Jim (September 4, 2015). "The long, strange history of lululemon: North America's weirdest clothing brand". Business Insider. Retrieved 24 April 2020.
  9. ^ a b c d e "lululemon: In an uncomfortable position". Fortune. Retrieved 2018-11-01.
  10. ^ Ball, Yvonne. "lululemon IPO Runs Up 56%". WSJ. Retrieved 2018-11-01.
  11. ^ Ogul, David (2013-12-10). "Chip Wilson: lululemon Chairman Resigns; TOMS CEO Taking the Helm". Newsmax.
  12. ^ Suzanne Bearne, Drapers. "lululemon limbers up to open first UK store in Covent Garden." February 20, 2014. February 4, 2015.
  13. ^ "Power shifts at lululemon as Chip Wilson seals deal". Globe and Mail. 11 June 2014.
  14. ^ Michael Calia, February 2, 2015, Wall Street Journal, lululemon Founder Wilson Quits Board: Resignation Comes About Six Months After Disagreement Was Settled on Yoga-Apparel Maker’s Strategy, Accessed May 6, 2015
  15. ^ Huffington Post, Chip Wilson Leaving lululemon
  16. ^ D'Innocenzio, Anne. "lululemon's CEO resigns over issue of conduct". Chicago Tribune. Retrieved 2018-02-06.
  17. ^ Thomas, Christina Farr, Lauren Hirsch, Lauren (2018-02-06). "lululemon CEO left in part because of relationship with female designer at the company". CNBC. Retrieved 2018-07-15.{{cite news}}: CS1 maint: multiple names: authors list (link)
  18. ^ Hanbury, Mary. "lululemon just made a bet that the $1,500 interactive workout Mirror is the future of fitness, and it should terrify boutique workout studios". Business Insider. Retrieved 2019-10-31.
  19. ^ Terlep, Sharon. "Lululemon Buys Mirror, an At-Home Fitness Startup, for $500 Million". wsj.com. Retrieved 30 June 2020.
  20. ^ Lieber, Chavie (2014-01-09). "The Self-Help Movement Behind lululemon's Eerie Dogma". Racked. Retrieved 2019-10-07.
  21. ^ a b "CEO: How to build trust inside your company". CNN Money. Archived from the original on 2012-11-27. Retrieved 2012-10-18.
  22. ^ "Women's Accessories". Lululemon.
  23. ^ "Lululemon Partners with APL to Offer Athletic Shoes In-Store". lululemon Athletica.
  24. ^ Segran, Elizabeth (10 September 2019). "Lululemon's first new brand, 10 years in the making, is here". Fast Company. Retrieved 13 September 2019.
  25. ^ Stankiewicz, Kevin (2019-10-29). "Lululemon CEO: To really pop our menswear line, more men need to know we actually have one". CNBC.
  26. ^ "LOCO FOR LULU". Canadian Business. 84: 28–32. May 2011. ProQuest 865046155.
  27. ^ Touchette, Ben; Schanski, Megan; Lee, Seung-Eun (2015). "Apparel brands' use of Facebook: an exploratory content analysis of branded entertainment". Journal of Fashion Marketing and Management. 19 (2): 107–119. doi:10.1108/JFMM-04-2013-0051.
  28. ^ a b Story, Louise (2007-11-14). "Seaweed Clothing Has None, Tests Show". The New York Times.
  29. ^ "Lululemon VitaSea Clothing: Competition Bureau Takes Action to Ensure Unsubstantiated Claims Removed from Lululemon Clothing". Competition Bureau. Retrieved 2007-11-16.
  30. ^ "What Lululemon's revealing pants say about yoga". Los Angeles Times. "It seems that Lululemon, the Vancouver-based company, had to recall some of its yoga pants because they are too sheer. This is not, it turns out, a minor problem. ...it's not just the adorably named Lululemon that has a problem with see-through yoga pants. Many brands, when stretched just so, are sheer."
  31. ^ Michelle Chapman, AP Business Writer, November 1, 2013, USA Today, "New quality complaints about Lululemon pants: Just a few months after company pulled yoga wear from shelves, new quality issues arise". Retrieved May 6, 2015, "...New yoga pants ... recent complaints ... still too sheer... pants pilling after a few months of wear — or even just a few uses — and about holes and seams coming apart..."
  32. ^ Sinnema, Jodie (21 December 2010). "Lululemon issues recall for shopping bags due to lead risk". Edmonton Journal. Retrieved 6 May 2015. People who purchase yoga pants, hoodies or headbands from the more than 100 Lululemon stores in Canada, the U.S. and Australia often save such bags to carry their lunches to work
  33. ^ 13 February 2015, BBC, 'Yoga pants': Are leggings and other tight trousers indecent? Are yoga pants a threat to public decency? It might seem so after the beloved athletic wear once again made headlines - this time after a lawmaker debating public decency said the pants "should be illegal"., Retrieved May 11, 2015, "...2013 when Lululemon, a large clothes retailer, had to recall many of its leggings ... sheerness ..."
  34. ^ June 10, 2013, Tiffany Hsu, Los Angeles Times, Lululemon CEO Christine Day to step down after sheer-pants scandal, Retrieved May 6, 2015, "...The so-called Pantsgate scandal, in which Lululemon pulled all of its black yoga bottoms in March after deeming the luon fabric to be too thin,..."
  35. ^ Isidore, Chris (March 19, 2013). "See-through pants problem causes Lululemon recall". CNN Money.
  36. ^ "Lessons Learned from the Lululemon Recall". The National Law Review. Risk and Insurance Management Society, Inc. (RIMS). Retrieved April 10, 2013.
  37. ^ Fred Meier (2013-06-10). "Stunner: Lululemon CEO Christine Day leaving". USA Today.
  38. ^ "Lululemon founder Chip Wilson's 5 most controversial quotes". Financial Post. 2013-12-10. Retrieved 2018-07-15.
  39. ^ Bhasin, Kim (2013-07-31). "Shunning Plus-Size Shoppers Is Key To Lululemon's Strategy, Insiders Say". The Huffington Post. Retrieved 2014-04-13.
  40. ^ a b "Outrageous Remarks By Lululemon Founder Chip Wilson". Business Insider. 2013-12-10.
  41. ^ Eliana Dockterman, November 13, 2013, Time magazine, "What Lululemon Could Learn From Abercrombie About Fat Shaming: A co-founder of Lululemon said his yoga pants just aren’t built for 'some women's bodies.' That's just a bad business decision", Retrieved May 6, 2015, "Clearly the feminist arguments against fat shaming are falling on deaf ears at Lululemon ... torrent of criticism hasn't inspired Wilson to change his tune."
  42. ^ Eun Kyung Kim (2013-12-10). "Lululemon co-founder steps down in wake of 'women's bodies' remark". Today.com.
  43. ^ "Lululemon Founder Slams Company, Now That He's Allowed To". BuzzFeed. Retrieved 2016-06-03.
  44. ^ Mau, Dhani (June 2, 2016). "Lululemon Founder Chip Wilson Created a Whole Website to Criticize the Company". fashionista.com. Fashionista. Retrieved June 3, 2016.
  45. ^ "Lululemon Founder Chip Wilson Created a Whole Website to Criticize the Company". fashionista.com. Retrieved 2017-02-15.
  46. ^ "Elevate lululemon". Elevatelululemon.com. Retrieved 2017-02-15.
  47. ^ Weller, Susan Neuberger (September 21, 2012). "S. 3523: Louboutin, Lululemon, and Fashion Design: Finally Getting Some Respect?". The National Law Review.
  48. ^ Weller, Susan Neuberger (November 27, 2012). "Lululemon and Calvin Klein Settle Yoga Pants Design Litigation". The National Law Review.
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