After a banner year, Lululemon is pushing ahead into the U.S. market, where the company has already opened 82 stores.
Lululemon CEO Christine Day is focused on forging ahead in the U.S. market, where the company has already opened 82 stores. (Return to B.C.'s Top 100 of 2011.)
You would be hard-pressed to find a global headquarters more laid back than Lululemon Athletica’s home in a former Coca-Cola bottling plant in the heart of Kitsilano. Rosy-cheeked employees appear uniformly hale and healthy padding about the office in the company’s now-iconic stretch pants. The front desk and office walls are bedecked with self-help jargon such as “Drink Water” and “Stress Is Related To 99% Of All Illness” and it appears all aboard the good ship Lululemon have taken it to heart.
But don’t let the relaxed vibe fool you into thinking there’s no substance behind the yoga brand. Lululemon saw a banner year in 2010, taking in more than $733 million in revenue and more than $125 million in income.
“I think people underestimate who we are; they say we’re just a yoga brand,” says CEO Christine Day. In fact, Lululemon has become much more than that. With yoga still at its core, the company increased its grip on the fast-growing running market in 2010 and saw much of its technical gear become day-to-day staples for many loyal customers.
“I think they underestimate the size of the opportunity, and the second thing they underestimate is the structural integrity of the business model we’ve built,” says Day, a former Starbucks executive who joined Lululemon in 2008.
At the heart of the company’s business strategy is discipline. With women throughout North America clamouring for Lululemon’s flattering and functional apparel, Day says, her greatest challenge in 2010 was keeping a firm hold on the reins to ensure the company didn’t get too big for its britches, chic as they may be: “We know we could grow faster from a consumer-demand perspective, but it wouldn’t be healthy growth for us as a company.”
As it was, Lululemon saw major increases in its percentage growth, with revenue up 42 per cent and income up 89 per cent over 2009. As the company strives to maintain its culture and a local community presence around every store – there are now more than 140 throughout Canada, the U.S., Australia, New Zealand and Asia – finding the sweet spot in a saturated market is a constant balancing act that is not easily understood by eager investors and employees, adds Day. “Being able to articulate that internally, being able to articulate that as a public company is really what we manage and what’s always interesting.”
With 45 stores in Canada, Day says the retail market here is close to maxed out. For 2011 and beyond, her focus is on growing Lululemon’s newly retrofitted e-commerce division and forging ahead in the U.S. market, where the company has opened more than 82 stores. It’s still a far cry from its eventual goal of hitting 300 locations in the U.S., but Day continues to approach Lululemon’s path to success with the measured patience of a practiced yogi.
“For us, there’s a dollar that isn’t worth it when you get past incremental sales,” she says. “If I’m opening a store that isn’t ready so we’re not being our brand, when I’m putting a product out there that I can’t stand behind, those trade-offs are ones we’re not willing to make.”