Lululemon: Yoga Clothing Expert Facing Fashion Challenges

In China, many people are willing to pay for a LV or GUCCI bag; but in Canada, girls are more willing to use their money to buy a Lululemon pants. The Lululemon yoga wear designed by Canadian businessman Dennis Wilson is close to the body, comfortable and exhausted, and is hailed as "the first professional sports brand in Canada".

Lululemon is regarded as the "Canada's first professional sports brand". In North America, it is the first choice for people to wear sportswear such as yoga and fitness. In China, many people are willing to pay for a LV or GUCCI bag; but in Canada, girls are more willing to use their money to buy a Lululemon pants.

According to data from market research firm ThinkEquity Partners, Lululemon’s “hardcore fans” will spend $92 to buy one of the brand's athletic pants. Nike sports pants cost about 60 US dollars, Under Armour's product is only 70 US dollars. Lululemon, which has numerous loyal fans, also organizes various free yoga, Pula and SALSA dance classes throughout the year to popularize the concept and methods of healthy sports.

"It is the fastest growing company at the moment," said Paul Lejas, a senior analyst at Credit Suisse Group. Lululemon currently has 86 warehouse stores worldwide. This year, the company plans to open 31 new stores in the United States, increasing the total number of stores to 69, and increasing the number of stores worldwide to more than 300 in the next few years.

Teaming up with local yoga masters

In 1998, Canadian businessman Dennis Wilson participated in a yoga class. However, he found that most of the students wear sportswear made of cotton-polyester blended fabrics, which are neither close-fitting nor sweaty. As a result, Wilson produced a black female yoga exercise trousers, which use a textile material that is both breathable and fit. Soon, Wilson founded Lululemon in Vancouver. The company opened a small design studio, retail store and yoga training hall.

At the beginning, Wilson personally designed, made clothes, and improved it based on feedback from people who practice yoga here. He still serves as chief designer of the company.

Because of its proximity to customers, the company was widely praised locally in Vancouver soon after its establishment. Soon, Lululemon began to expand into other cities. “Joining with local yoga experts is the key to Lululemon's success,” said Christine Day, CEO of Lululemon.

According to Kristin, Lululemon will first contact a local yoga instructor or coach of other fitness classes before entering a new city. Lululemon provided the coaches with free clothing for one year, while the latter served as Lululemon's “ambassador” who not only wore Lululemon clothing in front of students, but also provided feedback on the design to the company. In addition, they can also Lululemon and give buyers a certain prize: for example to provide free yoga courses, these activities are sponsored by Lululemon, places in the ordinary loft or apartment.

“Using yoga clothes precisely as a market segment for yoga wear” has brought lucrative returns to Lululemon. In 2007, company sales jumped by 85% to reach US$275 million; profit soared by 300% to US$31 million.

Listen to the sound from the bottom

On June 4 last year, Christine officially took over as CEO of the company. She likes to visit each shop in person and obtains useful information from front-line employees. At an ordinary breakfast party, she likes to ask her employees: “What was the stupidest thing I've done in the past 60 days?”

"'Listen to the sounds from the bottom' is the most important part of Lululemon's corporate culture." Christine said. In Vancouver, a very ordinary Sunday, Kristin is rushing to help customers in the fitting room to trousers. At Lululemon, this is a common business process. From top management, financial accounting, and design teams, each employee of the company must work at least eight hours in the store every month. For a retail company, this rule is extraordinary. This is a measure to bring employees close to customers, and these customers are growing yoga families.

Before joining Lululemon, Kristen was Starbucks' Asia Pacific Regional Director. Starbucks is a model for Lululemon and also provides a lesson for it. Christine said: "At Starbucks, we should not give up authentic Italian espresso coffee so quickly."

In 1986, Starbucks CEO Howard Schultz recruited Christian as his assistant. From bookkeeping to human resource management, she handled all things well and she was able to go all the way up. In his autobiography, Howard Schultz affirmed Christine's early idea that the cafes of this coffee chain should be designed to "like sisters, each with their own unique appearance, but clearly with the same The branding of a family."

face the challenge

Kristin is very kind and friendly, but she admits frankly how to increase consumer confidence while the company continues to grow and grow. This is a big challenge for her: “This is not whether we can become big companies. The question is whether we can gain the trust of consumers."

Before, Lululemon had escaped. In November 2007, a report in The New York Times stated that Lululemon did not honestly inform consumers about the composition of a clothing fabric containing seaweed in order to maintain skin moisture during exercise. Lululemon explained that a third-party test confirmed that his clothing contains a seaweed derivative, but the company removed the ingredient from the product label.

An even more pressing challenge is the inventory problem, which has affected Lululemon's profitability because the company has to pay extra to ship the out-of-stock products to the store. Analysts pointed out that small-sized garments in Lululemon's coastal stores are often out of stock, while shops in the Midwest region often have large-size garments out of stock. Kristin said that the company has adopted a new inventory management system and will spend $1 million to establish direct sales sites. Kristin is very clear that while the recession has caused other retailers to agonize, she still has a chance to correct her mistakes.