retail_4.jpg

Starbucks Corp. has had a bit of a roasting lately. Its stock price has nosedived from a high of $39.63 US in May 2006 to $17.89 US in March 2008, and in late January the java giant announced it was closing 100 stores in the U.S. and pulling the breakfast sandwiches it launched just a year ago.

But one guy who’s clearly been sipping the skinny lattes is Lululemon Athletica Inc. CEO Bob Meers. Last October Meers added former Starbucks CFO Michael Casey to its board of directors and then, two months later, poached Starbucks’ president of Asian operations, Christine Day, appointing her executive VP of retail operations.

“When I looked around at companies that had created a unique proposition and been able to maintain it through their growth, I had to look at Starbucks, Whole Foods, Apple Computer,” Meers tells BCBusiness. Starbucks won.

Former Reebok CEO Meers is leading the yoga-wear retailer’s ambitious expansion into the States – a move that has not been without its growing pains. In November the made-in-Vancouver success story was forced into damage-control mode when the New York Times, in a front-page exposé, reported that tests of its purportedly seaweed-infused VitaSea clothing line uncovered zero trace of anything from the oceans.

“When you’re small and local, then you can be cute and people will be forgiving,” observes UBC marketing instructor Paul Cubbon. “But I think it’s no accident that it was the New York Times that broke the story… [Lululemon] had developed a high profile in places where they weren’t loved as a local hero.”

Starbucks is no stranger to the media burn either: in February 2007, publications ranging from Business Week to the New Yorker gleefully reported on a leaked memo from Starbucks’ founder (now CEO) Howard Schultz to then-CEO Jim Donald. It read: “We have had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience... Some people even call our stores sterile, cookie cutter.” New Lululemon exec Christine Day isn’t about to criticize her former employer. “When you start doing 1,000 [new stores] a year and you do it year after year, you’re going to end up with a few stores that are just mistakes… Starbucks is in the place of making some tough choices,” she says.

The biggest challenge for Lululemon now? “Not getting to the point where we have to make those choices.”