Founded by Dennis J. Chip Wilson in Vancouver, Canada in 1998, Lululemon Athletica (Twitter: @lululemon) is a yoga-inspired, athletic apparel company with a vision to create a community hub for people to learn and discuss physical aspects of healthy living, mindfulness and living a life of possibility.
The story behind the brands logo which is actually a stylized ‘A’ represents the Athletica in Lululemon Athletica, while also representing a woman’s hair and face outline – towards whom the brand was originally focused.
The brand opened its first store in 2000 as a yoga wear speciality store for women and by 2008, it had sold USD 350 million worth of apparel in 113 stores. Today, Lululemon enjoys presence in 19 countries with approximately 354 stores and a revenue of USD 1.37 Billion with a wide range of apparel for yoga, running, cycling and training for both men and women.
The brand has successfully distinguished itself through its high quality products and a customer-centric marketing approach that focuses on creating real relationships with its guests by understanding their passion and celebrating their goals and as a result has a very loyal customer base. The brands marketing strategies include leveraging social media, word-of-mouth, in-store displays and other grassroots strategies including local initiatives such as the ambassador program that involves collaboration with famous athletes and instructors who promote the brand thereby providing credibility to the company. Since 2011, brands Twitter followers have seen an increase of approximately 621 percent whereas Facebook followers have increased nearly by 200 percent.
The company’s comprehensive growth strategy and a well-defined business model has helped it become successful and stand ahead of the competition. It sells its products through independently owned and operated stores rather than franchisees in order to be able to provide utmost levels of quality service to their customers and make long-term investments if required. In order to understand the new market and gauge the demand levels the company first rents temporary shops/ showrooms before expanding into a permanent space.
The brand has been a part of many controversies over the years. In 2007, Lululemon’s claims about its product being made with seaweed thereby providing anti-inflammatory, antibacterial, hydrating and detoxifying benefits were considered false after failed laboratory tests. In March 2013, there were large number of customer complaints about its black yoga pants that were too sheer and the company was forced to recall 17% of its sold pants which impacted its financial results. Following the debacle, the founder of the brand made a controversial statement on TV body shaming plus-sized women which caused an outrage amongst customers leading the company into dropped sales and losses. In May 2014, Wilson resigned as chairman of the Lululemon board and soon after sold 50 percent of his shares in the company.
However, despite the downturn, the brand regained its popularity soon enough, given its product quality and has seen an increasing growth chart ever since.
According to a 2015 report by Morgan Stanley, the market for active wear is expected to reach $83 billion in sales by 2020 which is 30 percent more from 2015. In order to leverage this growth, the brand has been focusing on expanding its online presence which is due for relaunch this year.