how chip wilson made lululemon – doing the right thing

the yoga industry’s top name for style & function

Chip Wilson, father of five boys and founder and chairman of Lululemon Athletica, arguably the most iconic yoga/athletic apparel and accessory line in North America, has enjoyed a lifelong obsession with athletics and high intensity, high impact sports. The same could be said for his taste in business ventures. In 1986 Wilson founded Westbeach Snowboard Ltd., a surf, skate, and snowboarding business that effectively brought the West Coast boarding culture to Canada. After turning Westbeach into a profitable apparel and sporting goods retailer, Wilson sold it to Morrow Snowboards, a company based out of Portland, OR. 

Unemployed and looking for a way to heal his body after all those extreme boarding falls, Wilson started taking Ashtanga yoga classes in Vancouver; it was a nice change of pace. “It was really the first yoga class I’d ever heard about. I went to it and there were six people in the first class and in 60 days there were 60 people.” After observing the rapid (and rabid) growth of yoga in Vancouver and the lack of appropriate apparel, Wilson saw a niche for a new business. “Because I came out of the technical clothing business I could see how everyone was sweating in class and their clothes were binding and not really working and I thought, ”˜Wow, I’m unemployed. I know how to do this and this is what I like to do.’ And so putting the yoga and the technical clothing together was really natural for me.”

Wilson noticed that the women in class, many of whom fell between the ages of 25 and 32, were wearing what he calls “dumbed-down men’s clothing” ”” things like baggy T-shirts and cutoff sweatpants. The interesting thing was that outside of class these women were interested in feminine fashion ”” they just didn’t have flattering yoga options to choose from. “They had been brought up as daughters of the women who went through the feminist movement where they wore big shoulder pads and dressed like men in the board rooms. These daughters rebelled against what their mothers were wearing and felt like they didn’t have to dress like a man to be treated like one.”

Lululemon first began as a design and retail space where people could come in and take an active part in the creation process. Wilson wanted to hear what actual yogis had to say about fit and function. His initial vision was to create functional and fashionable yoga clothes for both women and men, but he did not anticipate the demand for yoga clothes to be able to transition into street wear as well. “I think we never could have foreseen that when people do yoga, they’ll leave class, go to coffee, go shopping and then go home. It gave a lot more value to people than just buying a pair of Lycra® shorts for spinning. I think the biggest change was the realization of how big the market was for yoga street wear.” 

Even with a clear business plan, starting from scratch certainly had its challenges. “In any kind of business I think it’s the economy of scale production. You have to make at least 500 of something in order to get the cost down and make a profit in selling it. So I had to have 500 each of six or seven styles and because I wanted to do everything through our own retail stores, we weren’t really selling any of them for a long time. I didn’t really want to go wholesale, but it ended up that I had to because I started running into cash problems. Sure enough a couple of companies I wholesaled to went bankrupt so I didn’t really make any money, but it helped me solve my problem of how to get to 500 of each piece.”

Deciding to run a business is also making the decision to go with the flow and be flexible, to make adjustments as the need for change arises. “Originally, I got into Ashtanga and didn’t really know there were any other types of yoga classes out there. It’s just like when I was in the snowboarding business; there was regular boarding at the start and then there was racing, downhill, and then back country. It allowed for the creation of different types of clothing meant for each one. And that’s kind of what I saw happening in yoga.” Wilson began developing different variations of functional clothing for different styles of yoga. For hatha blend-style classes with relatively low impact, Lululemon looks toward warm and stretchy garments that don’t bag; for Bikram and other heat-based practices, they design really light items; and for Power and Ashtanga, they use Lycra® and nylon pieces with a lot of stretch and movement. Staying aware of yoga’s evolution and its different facets is an essential component of Lululemon’s success. Instead of getting stuck in one idea of what yoga clothes were and are, Wilson keeps his sights on the current trends and needs of the yoga community.

“First off, I think function is fashion for us. First, it has to function. And then once we’ve got the function down, I think that we have a pretty good eye for what looks good. I think that was the big thing that was missing in athletic clothing when I started Lululemon. My goal was to have the highest quality of goods in the yoga market, so I think that’s what people will see ”” our fanaticism about the functionality of each piece.” 

Adjusting design theories wasn’t the only part of Lululemon that went through a shift as the business grew. The initial mission statement was providing components for people to live longer, healthier and more fun lives. “We started to see that as limiting and so we moved that to the mission statement for our design team. Then the mission statement for the company became moving the world from a place of mediocrity to greatness.” It might sound like a lofty statement, but Wilson and all of his Lululemon employees take it very seriously and embrace it wholly. 

Wilson believes their mission is accomplished by starting from the ground up with their renowned training program. “Our expertise is our training program for our people and it’s very extensive. People have to have about 40 hours of training before they can start to work at the company and it really has a lot to do with growth and personal responsibility. We found that the type of training we have was really effective in getting to know the people and who they were at work. We started expanding and we really got that sense that we were helping make the world a different place.”

At corporate headquarters in Vancouver, there aren’t many traditional offices. People sit in pods, helping to further the sense of community Lululemon strives for. When Wilson was offered a big corner office this year, he felt uncomfortable; after only a short while he was back on the design floor, just one of 50 desks. Wilson clearly walks the walk when it comes to his philosophy that all employees are equal. Not only did he reposition his desk, but he requires all of his employees, no matter what level of seniority, to work the store floor once a week. Employees are placed where they can see firsthand the work they do. A designer, for example, would work the fitting rooms and listen in on the comments customers are making about fit and style. 

Wilson encourages personal development for all his employees by having them work their way through a library of books he selected, emphasizing different topics he thinks everyone should read to get in touch and get ahead. Another contributor to employee happiness at Lululemon is the practice of goal setting. Employees who feel on task and have a strong idea of what to strive for are more productive and content. They are asked to set personal, career and health goals for the next two, five and 10 years. Lululemon workers aren’t just happy with the status quo; they’re always striving and always out in the open with what they’re striving for.

The Vancouver office houses a yoga studio that offers employees classes five days a week, one at noon and one after work. In addition to the in-house classes, all employees are offered two paid-for classes in the community at affiliated yoga studios. This not only keeps staff healthy and balanced, but it gets them out and about in the yoga world, testing products and talking to students. Other unique benefits include showers, which are provided at most Lululemon stores to encourage employees to walk or bike to work in warm months and participate in business meetings atop Grouse Mountain, a local peak in Vancouver where Wilson encourages his colleagues to hike with him to the top.

As of March 2013, there are 211 Lululemon stores worldwide, including US branches in California, Chicago, Boston and New York, two stores in Tokyo, one in Melbourne and many across Canada. Creating and maintaining a welcoming, healthy and vibrant culture at all of their stores is an enormous part of Lululemon’s vision and success as a company … and it shows. When a customer walks into a Lululemon store, s/he instantly feels a difference. Employees are genuinely happy to be there, genuinely enthusiastic about their product and genuinely excited to share their knowledge. “I feel like once you cross the bridge of giving without expecting anything back, then amazing things happen to the person or corporation. So from a charity point of view, we train our people and put a lot of money into them and don’t expect anything back in return from them. They can leave the next day and we’re happy for them. We know we’re sending people out with good training and the ability to make a difference in the world.”

Lululemon currently has over 6,000 employees. While the hiring process is selective, they welcome anyone who’s inspired by what they see to apply. When hiring, Lululemon looks for people who have and aspire to have greatness in their lives. People who are enthusiastic, passionate, feel responsible for their own lives and are determined to get the most out of it, are encouraged to apply. “People are usually attracted to the company and want to find out what’s so great about it, so it’s pretty easy to hire and it’s pretty easy to enroll people in our training program ”” they’re usually inquiring about it just stepping into the store,” says Wilson.

Instead of using professional models, Lululemon uses ambassadors, specially selected instructors, athletes and other role models in the community who embody the Lululemon spirit, to model their clothing. Using real people gives the company real feedback and furthers its concept of function and utility above all else; if this actual yogi is wearing these pants, then why shouldn’t you?

Feedback is an essential part of the unique Lululemon culture. In the stores, whiteboards or slips of paper are available where customers can write in comments for how to improve pieces; this is where a lot of success in the detail and function of the fabric have really come through. Because they’re based on the West Coast and have pieces moving to places like Tokyo, Hong Kong and Australia, it makes sense for Lululemon to manufacture most of their clothing in Asia. “But we keep 20% of our production here in Vancouver, though, for turnover. So if we hear from local athletes and yogis, ”˜Gee, I wish I had a garment that looked and moved like this’, we try to get on it right away, get it out in stores and see what the general populus thinks.” Wilson is tapped into the fact that the world moves fast and if you don’t keep up, you’ll lose business.

In keeping with the company’s philosophies, Lululemon has always strived to be ecologically responsible and green, using things like recycled floors, half-flush toilets, LED lighting and non-toxic paint in their headquarters and stores.

In terms of advice for potential or current entrepreneurs, Wilson says to be sure to analyze where you and your idea stand in relation to other current businesses out there. “It was really easy for me because I started in yoga in 1998, and very few people were doing it at the time ”” I can’t even think of anyone else who was doing clothing at the time. People were importing Thai fisherman pants or cutting things off. So if you are someone getting into the yoga business now, then you really need to decide to get big really quick and have a lot of money behind you because you’d have to fight your way through all the people already established.”

Currently, Lululemon is working with its network of ambassadors and local yoga studios to expand their outreach and turn their stores into community epicenters for health-related resources. Ultimately, they want to be a go-to spot for people to turn for education on healthy and inspired living. Employees are proud of their eclectic community boards, which are hung in each store and showcase anything from local yoga and health events to information about the staff and their goals. 

“I think we’ve succeeded because we have a higher vision; we know that making money is a great thing but it doesn’t get you up in the morning. So I think it’s that higher vision ­”” we’re pretty holistic; we’re not fanatic, corporate, social responsibility people, but our thing is to always do the right thing. And I think that’s what people are attracted to.”

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