Soon after I returned to work from maternity leave a few years ago, I came to realize that I had been out of touch with the fashion world by being absent from the shopping malls for over two years. When a young co-worker mentioned about Lululemon, I bluntly asked her whether it was kind of fruit. She instantly burst into laughter. By the time I got to know what Lululemon is, all of sudden I began to spot Lululemon everywhere. Every industry must go through 4 life cycles: introduction, growth, maturity and decline. Unlike anything related to fancy Web 2.0, high tech or green energy, retail business in general is considered as a mature industry in the West. Similar to middle-aged man busy dealing with mid-life crisis, all retail behemoths have been struggling to find ways to generate new streams of revenue or boost the sales per square foot. For instance, McDonald has revamped menu items to offer healthy choices and launched McCafe to compete with Starbucks. Walmart has expanded their food shelves to diversify their consumer product offerings. Nike has continued to sign up endorsement agreement in huge sums with superstars to promote their brand. Among all the buzz, Lululemon has quietly ascended into stardom from obscurity within 10 years in this seemingly boring industry. Based in Vancouver, British Columbia, Lululemon originally started out with a single design studio and retail store in 1998. Self-described as a yoga-inspired athletic apparel company, Lululemon has designed and marketed top quality sportswear to fit so beautifully a woman’s body with its ingenious design, lively color, perfect symmetry and comfortable materials. Dennis "Chip" Wilson, the founder, also created the famous manifesto with multiple healthy and inspirational messages which have become company’s culture adored and followed by millions of fans. Since its IPO on Toronto Stock Exchange and NASDAQ in July 2007, Lululemon has enjoyed phenomenal expansion in business with average growth of approximately 70% in revenue and over 200% in net income over three years. With few TV advertisements and endorsement contracts, Lululemon has opened approximately 130 retail stores in US, Canada and Australia as of 2010 by setting up showroom to test the local market first. Compared to around 700 self-operated retail stores and 50,000 retail accounts worldwide for Nike, Lululemon is still a dwarf. However, it has claimed market cap of over $3B with an enviable P/E ratio in the range of 35 to 45, well above the average of 15-25 for industry giants like Nike and Adidas in the West and Anta and Peak in China where retail business is still at the burgeoning stage. When beauty and creativity prevail, size no longer matters. I still remember my first visit to a Lululemon store shortly after my earlier embarrassment. The moment I laid my eyes at their clothes, I felt the urge to throw my Nike and Adidas outfit out of my wardrobe. Ever since then, Lululemon has become one of my beloved stops at the shopping centres. Even without buying anything in the stores, the sheer pleasure of looking at the shining colors, touch of the soft fabric and feel of the vibrant energy among customers is immeasurable. Whenever I get the chance to read its manifesto on its products, website or shopping tote, I can always find something new and inspirational into life. To me and many other people, Lululemon symbolizes not only beauty and fashion but also life style and philosophy. Being one of my favourite companies, I always like to follow Lululemon’s performance. When its Q2 earning was released recently, it was not surprising to see the momentum continued to build on with the growth of 62% in revenue and 176% in operating income over the first two quarters compared to the same period last year. “Great!” I thought to myself. The stock price jumped 3% at the news with P/E reaching 40 whereas other much bigger brothers still remained at dismal 15 or 20. “You are the winner regardless your size.” I grabbed my Lululemon gym bag. Well, when it comes to body, size still matters. As I walked out to my car, I recalled one of its manifesto: Lululemon creates components for people to live longer, healthier and more fun lives. “That is absolutely right!” I stepped onto the gas pedal. When I looked into the mirror at myself in Lululemon outfit in the gym, another manifesto resonated in my head: Your outlook on life is a direct reflection of how much you like yourself. “For sure, let me just start by loving my body first!” I pushed the start button on the elliptical. Lululemon Manifesto Breathe Deeply Stretch Out
