Glenn Murphy
Chairman and Director, Board of Directors
lululemon athletica inc.
1818 Cornwall Avenue Vancouver, BC V6J 1C7

Please circulate to the remaining Directors in advance of the 2022 AGM.

Re: June 2022 lululemon AGM

The underlying foundation of lululemon was a stand for health, fun and longevity. This is based on the top two human instincts of survival and reproduction. lululemon’s success was a counter business model to old school American, non-technical apparel and NY fashion media branding. lululemon stood for authenticity as a human being and giving before expectation of return.

I suggest lululemon get clear if it stands is for “health, fun and longevity” or for the crowded diversity and inclusion conversation. The lululemon brand is fades when it jumps on bandwagons as opposed to standing for its foundation.

An unknowing or uniformed person would view lululemon as a run-away success. I would suggest lululemon succeeds because no competitor has replicated lululemon’s initial DTC model for technical apparel. Not only was lululemon the inventor of the technical apparel category but it was in the right place at the right time, with the perfect number of retail stores to have ecommerce flourish. Based on the book the E-Myth, lululemon from its inception created processes for exponential growth. Timing has been lululemon’s best friend.

In 2001, we declared Nike as our competitor and the GAP is the worst run apparel company on the planet. 20 years later this prediction has proven out as Nike moves forward with DTC and the GAP vertical model collapses as finance/merchants have repeatedly controlled brand and product. It is important lululemon takes this seriously as the joke on the street is: lululemon is more concerned with delivering a size 20 bra to a customer in Omaha than stunning apparel to the fit, sexy influencer in L.A.

I suggest lululemon expand its board and create a brand/product committee comprised of DTC athletic apparel business founders or proven creatives to guide the company away from a GAP default future. This idea changes a board from one that that solely counts profit to one that knows why and how the company makes the money.

lululemon’s board should analyze why it cannot find its way with forward thinking entrepreneurs. Lululemon should hire a consulting firm to analyze as to why the American street fashion apparel companies failed and what stage lululemon is in the life cycle. The consulting firm should provide 5 actions to reignite consistent reoccurring reinvention.

I am encouraged to hear lululemon’s commitment to men’s product. Men’s has been shunted aside since 2010 and is a fraction of what it could have been. I am encouraged to see the shoes come to life and I coach that lululemon must keep in front of technology and continue to differentiate though comfort and feel. To continue to own the women’s market is lululemon’s anchor. Shoes make sense for lululemon as a natural extension as long as the stores do not smell of industrial rubber. Skin care products and digital workouts do not fit and are drags on the selling system (assuming the board knows what the selling system is for lululemon).

I would encourage lululemon to revive its blue-sky program to fund entrepreneurial start-ups with an apparel expertise and youthful point of view that goes missing in mature companies. To be successful, lululemon must fund this division with funding external from SSC controls. A venture must be allowed to thrive with five years of funding to attain economies of scale to not be ignored once brought into the system. Most new ideas fail because the management bonus structure favours the incumbent monolith.

If the business cannot use its money better than moving into Mirror and skin products, I encourage the company to provide dividends for its shareholders. Hiding Mirrors metrics inside of lululemon numbers is not fooling anyone as recent share price has shown.

lululemon’s design success was mixing west coast function with Italian suit styling. To elevate femininity, we brought in dance wear designers. The lululemon design ethos is showing up to satisfy the mid-American taste, driven by proven data from past seasons sales. Merchants are making decisions in lieu of creative. I suggest lululemon find upper management who knows how to hire creative people and give them decision making power. Hiring from other athletic companies will give lululemon more of the past and not differentiate it for the future.

Sincerely,
Chip Wilson