Lululemon Athletica

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lululemon athletica Inc.
TypePublic
Traded asTSXLLL
NASDAQLULU
Industryathletic clothing
Founded1998
Founder(s)Chip Wilson
HeadquartersVancouver, BC, Canada
Number of locations142 (May 2011)[1]
Area servedCanada, United States, Australia and New Zealand
Key peopleChristine Day (CEO)
ProductsAthletic Apparel and Accessories
RevenueIncrease US$452 Million (FY 2010)[2]
Operating incomeIncrease US$85.5 Million (FY 2010)[2]
Net incomeIncrease US$58.3 Million (FY 2010)[2]
Total assetsIncrease US$307 Million (FY 2010)[3]
Total equityIncrease US$233 Million (FY 2010)[3]
Employees2861
DivisionsLululemon Athletica
OQOQO
Ivivva Athletica
Websitewww. lululemon.com
 
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lululemon athletica Inc.
TypePublic
Traded asTSXLLL
NASDAQLULU
Industryathletic clothing
Founded1998
Founder(s)Chip Wilson
HeadquartersVancouver, BC, Canada
Number of locations142 (May 2011)[1]
Area servedCanada, United States, Australia and New Zealand
Key peopleChristine Day (CEO)
ProductsAthletic Apparel and Accessories
RevenueIncrease US$452 Million (FY 2010)[2]
Operating incomeIncrease US$85.5 Million (FY 2010)[2]
Net incomeIncrease US$58.3 Million (FY 2010)[2]
Total assetsIncrease US$307 Million (FY 2010)[3]
Total equityIncrease US$233 Million (FY 2010)[3]
Employees2861
DivisionsLululemon Athletica
OQOQO
Ivivva Athletica
Websitewww. lululemon.com

Lululemon Athletica Inc. (TSXLLL, NASDAQLULU) (play /ˌllˈlɛmən/), styled as lululemon athletica, is a self-described yoga-inspired athletic apparel company, which produces a clothing line and runs international clothing stores from its company base in Vancouver, British Columbia, Canada.

Contents

Company history

Dennis "Chip" Wilson founded Lululemon Athletica (usually referred to simply as "lululemon" or "lulu") in 1998 in response to increased female participation in sports and in accordance with his belief in yoga as the optimal way to maintain athletic excellence into an advanced age.[4] Wilson had previously made a foray into the sportswear business by setting up Westbeach Sports in 1979.

Wilson opened the first Lululemon store in the Vancouver neighbourhood of Kitsilano. It included a design studio, a retail store, and shared space with a yoga studio. As of October 2012, Lululemon runs approximately 165 stores. The majority of the stores are in North America, but Lululemon has stores presence in Australia and New Zealand. There are also showrooms in Hong Kong and Great Britain. In addition, Lululemon is sold at fitness studios including Physique 57, Corepower Yoga and more.

The OQOQO brand was melded into the main Lululemon product line in fall 2009 when the company launched Ivivva Athletica, a new subsidiary targeting girls from ages 6 to 12. Ivivva Athletica was announced by Lululemon in September 2009. Ivivva started with the opening of three stores in December 2009. As of October 2012, Ivivva has 14 locations - mostly located in Lululemon's principal markets in Canada and the United States.

In 2005, Advent International (partnered with Highland Capital Partners), a U.S. private equity firm, bought a 48% minority interest in Lululemon for a reported CAD $225 million, and former Reebok chief executive officer Robert Meers became the new Lululemon CEO. Wilson, the founder, now has 42% ownership, with retail staff owning 10% in stocks and shares. The company formed a partnership with Descente of Japan to oversee Lululemon's Japanese operations; however, in mid-2008, Lululemon closed its Japanese operations (three stores) to focus on the North American market. As of December 2010, Christine Day, a former Co-President of Starbucks International, is the chief executive officer of Lululemon.

Lululemon Athletica announced an initial public offering in May 2007 and became a public company on July 27, 2007. Chip Wilson rang the opening bell on the Nasdaq exchange in the United States that day.[5]

The Retail Council of Canada recognized the company as the 2003 Innovative Retailer of the Year in its "small store" classification.[6]

In December 2010, Lululemon announced a recall of some of the store's reusable bags that were distributed since the Vancouver Olympics in February 2010. The specific bags recalled were made in China from polypropylene, a common material used in reusable bags distributed by retailers. The concerns by Lululemon were due to reports that similar bags have been found to contain high levels of lead.[7] This follows grocery store chain Wegmans Food Markets which recalled their reusable bags in September due to similar concerns about lead.[8]

Corporate philosophy and practices

A woman practices yoga in Lululemon gear

Lululemon recently[when?] began imprinting "Who Is John Galt?" on its shopping bags, and featured praise to author Ayn Rand and her novel Atlas Shrugged on their website.[9]

Lululemon has its main factory in Vancouver, British Columbia, Canada. In 2004 production expanded outside Canada and currently takes place in factories in the United States, China, Israel, Taiwan, India, Thailand, Peru, and Indonesia.

The original intent of lululemon was to "elevate the world from mediocrity to greatness", and since then the mission has become to "create components for people to live long, healthy, and fun lives". Lululemon Athletica has seven core values that educators employed by the company are expected to articulate and embody. They include: quality, product, integrity, balance, entrepreneurship, greatness, and fun. It also has a manifesto which acts as a "truth check" (inspiration), composed of its own beliefs that staff, employees, and surrounding communities are encouraged to be inspired by daily. The manifesto was created by a third party, Blur Studios in Vancouver in collaboration with local artists. All manifesto artworks in Lululemon retail stores are copyrighted by the artists themselves, not Lululemon Athletica.

Every Lululemon Athletica offers free yoga classes. The company also offers health benefits, and growth opportunities to its employees and customers at store locations.[10] The company also pays for management staff and other employees who have worked for the company for over a year to attend the Landmark Forum, a personal development course.

Vitasea fabric controversy

In November 2007 The New York Times reported that it had commissioned laboratory tests that failed to find significant differences in mineral levels between cotton T-shirts and the fabric Vitasea, used by Lululemon in some of its clothing lines.[11]

Following the publication of the Times article, Lululemon commissioned a rush laboratory test that it claimed confirmed the seaweed content of its Vitasea line.[12]

Lululemon was subsequently forced to remove all health claims from its seaweed-based products marketed in Canada, following a demand from the Competition Bureau of Canada.[13]

Lululemon offers many different types of fabric. Luon is Lululemon's signature fabric. It is moisture wicking and allows for four way stretch. Luon is considered a "family" of fabrics, that is, any fabric that has the previous properties is called Luon regardless of composition. Originally, Luon was composed of 87% Nylon and 13% Lycra, but now different percentages and fibres may be used to achieve particular textures or colours.

2011 "Lululemon murder"

In November 2011, Lululemon employee Brittany Norwood was convicted of the first-degree murder of a co-worker, Jayna Murray, in the Bethesda, Maryland, store where both worked.[14][15][16] Prosecutors said that in March 2011, Norwood lured Murray to the store after closing, then attacked her, inflicting over 300 injuries, including head trauma and stab wounds.[15][17] Murray died in the store's back hallway, after which Norwood staged a crime scene to claim that intruders had raped both women and killed Murray.[14][15] The prosecution was barred from introducing evidence that Norwood was motivated by an accusation from Murray of shoplifting.[15][18] The defense argued for a conviction of second-degree murder, claiming the attack was not pre-meditated.[14] The case received intense media coverage and was commonly referred to as the "Lululemon murder".[14][15][16][18][19][20]

References

  1. ^ "Lululemon Athletica Inc. Announces First Quarter Fiscal 2011 Results" (Press release). Lululemon Athletica. 2011-06-10. http://www.lululemon.com/media/index.php?id=190. Retrieved 2012-09-19. 
  2. ^ a b c Lululemon (LULU) annual SEC income statement filing via Wikinvest
  3. ^ a b Lululemon (LULU) annual SEC balance sheet filing via Wikinvest
  4. ^ "Our History". Lululemon.com. http://www.lululemon.com/about/history. Retrieved 2011-11-19. 
  5. ^ "Dennis "Chip" Wilson, founder of Lululemon Athletica, presides over the opening bell". Nasdaq. http://www.nasdaq.com/reference/200707/market_open_072707.stm. Retrieved 2007-07-29. 
  6. ^ "Innovative Retailer of the Year". Retail Council of Canada. Archived from the original on 2006-04-05. http://web.archive.org/web/20060405141558/http://retailcouncil.org/awards/rcc/innovative/. Retrieved 2006-08-15.  Link inaccessible as of 2007-09-13.
  7. ^ [1][dead link]
  8. ^ David Gard/LNS. "Wegmans stops selling reusable bags after lead tests". NJ.com. http://www.nj.com/business/index.ssf/2010/09/wegmans_stops_selling_reusable.html. Retrieved 2011-11-19. 
  9. ^ Alexis (2011-11-02). "Blog | who is john galt?". Lululemon.com. http://www.lululemon.com/community/blog/who-is-john-galt/. Retrieved 2012-09-19. 
  10. ^ "lululemon athletica Assets Explode 69.78% Higher in the Last Year – Yoga Athletic Apparel Catches on Globally". Quarterly Retail Review. March 6, 2011. http://www.quarterlyretailreview.com/2011/03/lululemon-athletica-assets-explode-69-78-higher-in-the-last-year-yoga-athletic-apparel-catches-on-globally/. 
  11. ^ Story, Louise (2007-11-14). "Seaweed Clothing Has None, Tests Show". New York Times. http://www.nytimes.com/2007/11/14/business/14seaweed.html. Retrieved 2007-11-14. 
  12. ^ "Lululemon atheletica Confirms VitaSea Fabric Contents and Testing Process". Lululemon atheltica Corporation. Archived from the original on 2007-12-22. http://web.archive.org/web/20071222015702/http://www.lululemon.com/about/media/news/74. Retrieved 2007-11-17. 
  13. ^ "Lululemon VitaSea Clothing: Competition Bureau Takes Action to Ensure Unsubstantiated Claims Removed from Lululemon Clothing". Government of Canada. http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2517&lg=e. Retrieved 2007-11-16. 
  14. ^ a b c d Morse, Dan; Zapana, Victor (2011-11-02). "Brittany Norwood convicted of killing Lululemon co-worker Jayna Murray". The Washington Post. http://www.washingtonpost.com/local/brittany-norwood-convicted-of-killing-lululemon-co-worker-jayna-murray/2011/11/02/gIQAXdFvgM_story.html. Retrieved 2012-09-19. 
  15. ^ a b c d e Noble, Andrea (2011-11-02). "Guilty verdict in Lululemon murder case". The Washington Times. http://www.washingtontimes.com/news/2011/nov/2/closing-arguments-begin-lululemon-murder-case/?page=1&utm_medium=RSS&utm. Retrieved 2012-09-19. 
  16. ^ a b Martinez, Edecio (2011-11-03). "Brittany Norwood found guilty of first degree murder in Lululemon trial". CBS News. http://www.cbsnews.com/8301-504083_162-57317476-504083/brittany-norwood-found-guilty-of-first-degree-murder-in-lululemon-trial/. Retrieved 2012-09-19. 
  17. ^ Rosenwald, Michael S. (2011-11-02). "Inside the courtroom: The words hanging over the Lululemon trial". The Washington Post. http://www.washingtonpost.com/blogs/rosenwald-md/post/inside-the-courtroom-the-words-hanging-over-the-lululemon-trial/2011/11/02/gIQAn1cqfM_blog.html. Retrieved 2012-09-19. 
  18. ^ a b "Second Week of Testimony in Lululemon Murder Trial". NBC Washington. 2011-10-31. http://www.nbcwashington.com/news/local/132923343.html. Retrieved 2012-09-19. 
  19. ^ Noble, Andrea (2011-10-24). "Selection of jury starts in Rockville". The Washington Times. http://www.washingtontimes.com/news/2011/oct/24/selection-of-jury-starts-in-rockville/. Retrieved 2012-09-19. 
  20. ^ Morse, Dan (2011-10-23). "Lululemon killing trial begins Monday". The Washington Post. http://www.washingtonpost.com/blogs/crime-scene/post/lululemon-killing-trial-begins-monday/2011/10/23/gIQA2prxAM_blog.html. Retrieved 2012-09-19. 

External links