Little Black Stretchy Pants

by Chip Wilson

  Syd partnered his exclusive “loft store” concept with a focused campaign targeting Toronto’s yoga studios. He took rolling racks of clothes to the studios for people to try on as they were coming in and out of classes. It was precisely the grassroots marketing that had worked for us in Vancouver.

  Eight months later, in February 2002, Syd opened the lululemon store on Queen Street West. By then, the customer base was already established, and right away the store started putting up fantastic numbers. It felt like a well-executed success.

  More than that, the Toronto opening reassured me that if a similar plan was followed—opening inexpensive showrooms, educating the public, networking with yoga studios, and inspiring grassroots word-of-mouth conversations—the lululemon concept could work just as well almost anywhere. We had a successful formula for growth and expansion. We just needed to stick to it.

  Our First Quality-Control Problem

  We had fundamental confidence in our products. We didn’t even do sales or discounts. Then, in 2002, we experienced a quality control problem and had to recall approximately 2,000 pairs of pants due to the pilling of the fabric.

  I knew that authorizing the recall would nearly kill the company but was prepared to take that risk to maintain product integrity. I fully acknowledged the flaw in that batch of fabric.

  With technical knits, a thousand things can go wrong. Most bolts of fabric have one flaw, and that’s okay. Some have two, and it might be a problem, but three is a big issue. The problem comes when no one can predict what combination of three things out of a thousand creates a massive error.

  From this moment on, I became the “King of Luon.” I checked everything we made, and when I couldn’t check it, I made sure there was a designated king or queen to check it on my behalf. Our livelihoods were based on the quality of our proprietary Luon.

  After we pulled all the affected pants off the shelves, we had our Educators speak to every Guest that walked into our stores. We posted a notice above the cash register. We told our Guests we were responsible, and we knew it was a problem. We wanted them to return the subpar pants they may have already purchased. We would replace them with another pair from a different batch.

  Though we did a good job of taking care of our Guests and maintaining our integrity, I was now sitting on thousands of pairs of defective pants. I looked at them and realized that despite not living up to our high standards, they were still really good pants. The question was, what to do with them.

  We held a design meeting. At the meeting, it came to my attention that many customers had complained about how they would love to take their dogs walking wearing our Luon pants, but they couldn’t because the dogs’ hair would stick to the Luon.

  Here, I thought, was a unique solution.

  We took the pilling pants and built another pair of loose, woven, slick nylon pants over top of them. Dog hair wouldn’t stick to the woven nylon. What started off as a pragmatic way to put superficially defective pants to good use became lululemon’s “dog walking pants”—one of our bestselling items of all time.

  Around that same time, a woman entered the West 4th store determined to be refunded for a pair of pants that was pilling. This style pair of pants was not from the previously mentioned run. An object—I suspected a metal buckle on her hip purse—had repeatedly been slicing into her lululemon pants, as the flaw was specific to one location on the pant. She berated me in the middle of the store, in front of other Guests and Educators, demanding that I reimburse her for a faulty product.

  My dedication to selling quality clothing—and honest admittance of past flawed production—gave me the confidence to refuse this woman a refund.

  Chapter 17:

  Other Expansions

  The Trip with Shannon

  In August 2001, I planned to attend the Outdoor Retailer Show in Salt Lake City for our third time. The OR Show specialized in technical fabrics and outerwear and was a great source of inspiration for the company. I asked Shannon Gray, now lululemon’s head designer, to come along for the trip.

  By this point, Shannon and I had been working together for almost two years. During the first year, we didn’t see one another day-to-day, but during the second year, I got to know Shannon a little better. I had huge respect for her work ethic. As a designer, she was phenomenal.

  My own sense of design was far more obtuse than hers. I would experiment more and often go too far. Some things I came up with were home runs, some things were disasters. But Shannon had an ability to look at something and fit it, colour it, or make it look a certain way so that people would buy it in volume. This made us the perfect combination because I would have the far-out and technical ideas, which she would then hone to sell in volume.

  Thank God I let Shannon drive the product because I soon realized she was the best in the world at stretch-fabric fit. Lululemon would have been a shell of itself without Shannon’s expertise.

  Although I knew her well in a work capacity, Shannon and I had not spent time getting to know each other personally. We boarded the plane to Salt Lake City and chatted, not as boss and employee, but just as two people. Ten minutes into our conversation, I was struck by what an incredible woman she was.

  Away from work, I realized I was seeing her in a whole different way.

  We arrived in Salt Lake in the afternoon, but the trade show didn’t start until the next day. We were travelling on a shoestring budget, so as was standard for the usual three to four people we took to the shows, I’d only booked one room with multiple beds. We saw it as camping.

  After checking in, we dropped our things off, headed out for a city art walk, and then caught a free outdoor concert before dinner. We talked and laughed and then went for a swim.

  After a nice evening, we went back up to the room and stretched out on our separate beds. I turned on the TV.

  I was older than she was, I had no way of knowing if I was her type, and I was her boss. Shannon was the most valuable employee I had, in responsibility, integrity, and trust. I would never risk ruining our professional relationship and having her leave the company because I knew how hard it would be to get anyone else at her level of capability. She was far too important for me to risk making a romantic move.

  We each lay on our own beds while I flicked through the television channels. Then, Shannon got up. I assumed she was heading to the washroom. Instead, she came over to my bed and asked me to move over. After some time, Shannon put her head on my chest and closed her eyes, and we both fell asleep like that.

  In the morning, we woke up to a new reality. We hadn’t even kissed the night before, but everything had changed.

  As Shannon says: “Chip interviewed me for a job at lululemon in October of 1999. He was late for our meeting. I saw him peel into the parking lot, no shirt, no shoes. I then watched him rummage around in his car for something clean to put on. That was my introduction to Chip, him frantically picking up shirts, sniffing this one, sniffing that one, trying to find a matching pair of shoes… When my mom asked me how the interview had gone, I told her I wasn’t sure I’d get the job, but I did think I would marry him.”

  I couldn’t believe I had been working side by side with this incredible woman and did not understand how she felt. At that moment, in a hotel room in Salt Lake City, everything changed.

  Many years before, as a little kid, I’d thought my grandparents had the best possible kind of partnership. They not only loved each other, but they also worked together in almost perfect synchronicity. My whole life I’d been searching for something comparable and had so far never found it.

  Even in those first few moments with Shannon, I felt like I’d found what I was looking for. As crazy as it may sound, that morning in Salt Lake City, I asked her if she wanted to marry me and she said yes. Then we kissed. It wasn’t a great kiss (we both agreed). We were both unprepared. Still, our chemistry was powerful.

  Shannon told her parents right away. They were surprised, but okay with it. My own mom,
dad, sister, and brother were all a little more apprehensive about the whole thing because they didn’t know Shannon. There seemed to be a sentiment of not being sure it would stick, as if it was just a brief, happy delusion.

  My sons, JJ and Brett, were the two people whose feelings about this new development in my life were most important. In the past, the two had been a challenge for the handful of women I’d brought home to meet them, understandably out of allegiance to their mother.

  But since I’d started lululemon, the boys were always in and out of the store, so they’d met and spoken with Shannon many times prior to me explaining what was happening between us. In many ways, she’d already won them over. JJ’s own growing interest in design meant that he and Shannon had a lot in common from the get-go. He was only thirteen, but his vote of confidence helped to smooth things over with their mother, who’d been worried my new relationship might be disruptive for our sons.

  Workplace romances can be tricky, and it was reasonable for people to be concerned there might be favouritism, or that the work environment would change. But ultimately, the people we worked with knew how important integrity was to Shannon and me both, and how we would not let our relationship hinder lululemon’s success.

  We immediately fell into a routine. We worked twelve-hour days, went home together, worked out, ate dinner, went to bed, and woke up to do it all again. There was nothing to explain or apologize for since Shannon knew what the business was going through all the time. I could talk to her about issues and count on her to understand. I loved her and the life we were already building together.

  I also made good on that promise to put a real ring on Shannon’s finger just a short time later. We were in Paris at a fabric show. The ring I brought—which wasn’t extravagant by any stretch of the imagination—meant a lot. I was nervous to leave it in the safe in the hotel room, so I carried it with me everywhere, waiting for the perfect moment to ask Shannon to marry me.

  This trip was a week after 9/11 and security everywhere was heightened. I was worried that the ring would set off an alarm and I’d be forced to get down on one knee beside an x-ray machine. Luckily, that didn’t happen, and I finally popped the question at a nice little Parisian café. It was perfect.

  Initially, we figured we’d get married as quickly as we could. “We’ll just go to the justice of the peace, or we’ll just get the boys and pop off somewhere,” says Shannon. But then a good friend of hers insisted on putting something together for us. “She knew how busy we were with lululemon, working flat-out, seven days a week. She started planning a little backyard affair for the following spring, allowing Chip and me to grow the business we were both so passionate about.”

  April 20th, 2002 was a Saturday and our wedding day. I went into our West 4th Avenue store to work as I usually did. The number of Guests in our store had been steadily growing for a long time, but on that Saturday afternoon, I was taken aback by how many people were coming through the doors.

  The change rooms and cash desk had huge line-ups. The Educators were lit up with enthusiasm, and there was energy in the air. I immediately jumped in to help and worked at the front of the store, directing traffic.

  As the day went on, the store became even busier. I didn’t feel I could leave. I kept an eye on the clock. I was cutting it close, but I wanted to stick around to find out how our sales had gone. Plus, we needed every extra pair of hands we could get. It felt like we’d reached a critical mass.

  A seemingly random day in the calendar was doubling the best day of sales in the history of the company—$30,000.

  At the last possible moment, I rushed out of the store, ecstatic with the revenue and the experience of everything coming together. I had a dozen things to do, and I was running late, but the first thing I did was call Shannon. I couldn’t get over the fact there was no logic behind that day being so extraordinary. It wasn’t a holiday of any kind—it was just a weekend in the middle of spring.

  For the first time in a long time, I felt like a whole new future was ahead of me. I believed I could pay for a mortgage and raise a family without working myself to death. I felt like we would be fine. I rushed home, threw on my tuxedo, and with JJ and Brett as my best men, I married Shannon Gray in our backyard, surrounded by our friends and family.

  Shannon and I had turned a significant corner in our personal lives that April, and it felt like lululemon had too. Our store was doing huge amounts of business week after week. A few years earlier, I’d noticed women wearing our clothing here and there on West 4th.

  Now it seemed I was noticing the same thing all over Vancouver.

  The Manifesto

  At a certain point, I became aware it wasn’t just our designs that were becoming ubiquitous—it was what we were putting them in.

  The shopping bags we gave our Guests were suddenly everywhere I looked. Women, men, and even children were carrying them, using them as grocery bags, lunch bags, gym bags, shoe carriers, and just about everything in between. People had come into the store just to ask for bags and not even purchase anything. Our culture was being broadcasted far and wide.

  In 1998, I spent thirty-minutes compiling a list of sayings I called the Manifesto. It was just a list of random statements about how I lived my life with authenticity and integrity. Friends are more important than money, was one. Do one thing a day that scares you, was another. Children are the orgasm of life, another yet. Most of these thoughts had come from my life experiences, my parents, my commitment to transformational development disciplines, and our lululemon library.

  I thought these observations were interesting enough to post beside the cash register so people in line could read something thoughtful while waiting. I quickly found other people liked these observations and aphorisms and were asking for their own copies.

  I asked some surf and snowboard graphic friends of mine (Cowie And Fox) to make the Manifesto look like artwork. Then I photocopied a bunch to leave at the cash register. Most customers who came in the store wanted to take a copy, so we started putting them into every bag automatically.

  Soon afterwards, I thought of creating a bag with the Manifesto on it, instead of in it. I reasoned that the biggest waste in the world was pretty, useless packaging that came from the luxury fashion world. I wondered if I could develop a reusable bag that with the Manifesto, which would add to people’s lives instead of being another piece of garbage. I didn’t want people to walk around the street with a bag with a logo on it or lame words that showed to others that the person with the bag was wealthy enough to buy luxury. I was all about function, with fashion being a distant second.

  I wanted customers to be sitting in their car or on the subway or at home and pick up the Manifesto and read it. I noticed the transformational effect the Manifesto had on people. It validated the way I wanted to live my life, and I saw this occur for others too. The Manifesto was not inspirational, but aspirational.

  I researched a few different options and came up with a 100 percent polypropylene reusable shopping bag that was durable, waterproof, and recyclable. We created them for Christmas gift-giving, so that the present was “wrapped” in our Manifesto. As far as I know, we were the first company to make these expensive, recyclable shopping bags.

  As Darrell Kopke, our first general manager, recalls: “The fact that the word ‘orgasm’ was on the bags caused a bit of a stir. I got a call from an outraged customer not long after the bags came out. She was particularly upset, she said, because as a result of bringing the bag home, she had to explain the meaning of the word orgasm to her twelve-year-old daughter. I listened to her patiently and when she was finished I said, ‘You’re welcome!’ That was the end of the conversation.”

  As I reflect on the lululemon shopping bag, I realize just how great our branding was. The popularity of the bags was spectacular. Not only did they create conversation, but they were recognizable around the world! It was proof that our Guests aligned with our psychology of health, athletics, and a West Co
ast way of living.

  The Original lululemon Manifesto (2003)

  (these were the quotes on the side of the lululemon shopping bags)

  Coke, Pepsi and other pops will be known as the cigarettes of the future. Colas are NOT a substitute for water. Colas are just another cheap drug made to look great by advertising.

  Drink fresh water and as much water as you can. Water flushes unwanted toxins and keeps your brain sharp.

  Love.

  Do yoga. It lets you live in the moment and stretching releases toxins from your muscles.

  Your outlook on life is a direct reflection of how much you like yourself.

  Do one thing a day that scares you.

  Sunscreen absorbed into the skin might be worse than no sunshine. Get the right amount of sunshine.

  Listen, listen, listen and then ask strategic questions.

  Life is full of setbacks. Success is determined by how you handle setbacks.

  Compliments from the heart elevate another person’s spirit and will often result in an encouraging word for someone else—a domino effect.

  Write down your short and long-term GOALS four times a year. A class study at Harvard found only 3% of the students had written goals. 20-years later, the same 3% were wealthier than the other 97% combined.

  A daily hit of athletic-induced endorphins will give you the power to make better decisions and help you be at peace with yourself.

  Let SWEAT FLOW from your pores once a day to regenerate your skin.

  Jealousy works the opposite way you want it to.

  One hour of aerobic exercise will release endorphins to regenerate cells and offset stress.

  Wake up and realize you are surrounded by amazing friends.

  Communication is COMPLICATED. Remember that each person is raised in a different family with a slightly different definition of every word. An agreement is an agreement only if each party knows the conditions for satisfaction and a time is set for satisfaction to occur.