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YOGA CHIC

Inner beauty isn’t enough for Lululemon Athletica fans

BY MAURA K. AMMENHEUSER

They seek enlightenment and physical well-being through a 5,000-year-old Sanskrit philosophy, but yoga practitioners want to be dressed in the latest gear as they go through their oms (chants), asanas (postures) and dhyanis (meditations). Eager to oblige, Lululemon Athletica, a Canadian retailer of upscale yoga wear, is opening more stores across the globe to accommodate the growing number of yogis and yoginis in need of $120 coordinated outfits.

Lululemon’s first site, a combined store, design center and yoga studio, opened in 1998 in Vancouver, British Columbia. The company was the brainchild of sporting-goods visionary Chip Wilson, who also created Westbeach Sports, an eight-store surf-, skate- and snowboard-apparel chain in Canada that he sold the year before he launched Lululemon.

The retailer has since set up nine additional stores in major Canadian markets, mostly in street-front locations. The timing could not have been better, with the yoga craze gaining popularity. Lululemon’s sensuous, high-performance fabrics in combination with some creative marketing techniques have rapidly made the chain’s goods a status symbol among active Canadians.

“All mall developers in Canada know who Lululemon is,” said Ron V. Clarke, CLS, a leasing director for Montréal-based Ivanhoe Cambridge, which nabbed a Lululemon store for its newly expanded, 1.7 million-square-foot Metropolis at Metrotown shopping center in Burnaby, British Columbia.

Other countries will soon get to know Lululemon too. The U.S. is a very important expansion target. A Harris Interactive poll says some 15 million Americans practiced yoga in 2003, up 28 percent from the year before. Lululemon has three stores in California: one in Newport Beach’s Fashion Island (owned by The Irvine Co. Retail Properties), as well as a freestanding site in San Francisco and a second in Santa Monica. In addition, there are two stores in Australia and one in Tokyo.

Manfred Vollmer, the chain’s director of store development, says he expects to open about 250 units over the next five years — 20 in Canada and 150 in the U.S. Roughly 10 of those U.S. units will roll out within a year, he says, starting on the West Coast. Additional sites in Japan and Europe are under consideration too.

Club pants
Lululemon is becoming something of a cult phenomenon among yoga fans. Leslie Keller, a San Francisco public-relations executive, discovered Lululemon and became practically intoxicated over the clothes. She wore the chain’s logo pants to a yoga class she took while traveling on the East Coast several months later. Even there the people leading the class recognized the pants and knew Keller was “in the club,” she says.

By March, students at Hot Yoga Studio, Newport Beach, Calif., were showing up in Lululemon gear, said studio owner Eva Young, though the nearby boutique had opened just four months earlier. “The clothes are beautiful,” Young said. “I think [they’re] well made, and they fit the body really nice.”

Lululemon uses Lycra-blended fabrics that wick away moisture so they are fast-drying, says Kerry Brown, who manages the Santa Monica store as well as Lululemon’s U.S. public relations. The clothes are sewn with flat seams to prevent chafing, the bane not only of advanced yogis but also of long-distance runners or anyone who spends much of their day in clothes they worked out in. The designs include such functional details as long sleeves that cover hands for cold-weather exercising.

The clothes offer not only a pleasing cut but amazing durability, says Keller. “That’s why they can charge what they charge,” she said. (Pants typically cost about $80, tops about $44.)

That is steep, to be sure, says Keller, but there is justification in the quality and the feeling that the company cares about its customers. Others agree. “It is a little expensive, but they’ve done such a good job marketing the brand, it’s the brand that’s selling,” Clarke said.

Feel-good message
But the fanaticism seems inspired by more than flat seams and fitness fashion. Customers rave as much about the staff’s know-how and a feel-good corporate philosophy. In some ways, says Brown, Lululemon is even more about health and wellness than about apparel.

The company tries to teach people how to live longer and healthier. (The corporate “manifesto,” for example, urges people to drink plenty of water, among other things.) Employees receive subsidized yoga classes in the interest of helping them understand the activity and its products. Bulletin boards in the stores are loaded with information about local events.

Lululemon flexes some marketing muscle, considering its relatively small size. It quickly establishes itself in the local fitness community, for instance, by offering yoga, Pilates and other instructors discounts and cross-promotions. Then it names some of them “ambassadors” — they get free clothing and a stipend in return for talking up the brand. Lululemon also has yogis demonstrate their moves in the store windows and on the sales floor.

“I am a Lululemon evangelist,” says Laguna, Calif., resident Jeff Weisman, a yoga instructor who did an in-store routine on a display table in the Fashion Island store in December — dressed as Santa Claus. (Only about 20 percent of customers are men, says Brown).

Despite its initial street-front real estate focus, the chain is exploring other shopping center locations. So far only three or four stores are in centers, says Vollmer, and in new markets he still prefers street-front stores. But lifestyle centers work too, he says. In September a Lululemon opened inside a 250,000-square-foot, open-air center component at the Park Royal Shopping Centre, a 1 million-square-foot mall in West Vancouver, British Columbia. Another opened in August in Market Mall, Calgary, British Columbia, which expanded to 900,000 square feet with an open-air lifestyle component.

The landlords would not reveal specifics, but six months following the Park Royal opening, Lululemon is set to outperform that center’s best specialty fashion retailer by about triple, says Rick Amantea, a Park Royal vice president.

Jane Dorsett, Market Mall’s general manager, says she sees Lululemon’s sales per square foot proceeding at a healthy pace. “This is notable, as our sales performance as a property is C$628 [$520] per square foot.”

None of this is occurring in a vacuum. Lululemon does have competitors. In Newport Beach alone, workout mavens have Lucy and Nikewomen to shop. Lucy, based in Portland, Ore., runs 15 stores that sell stylish women’s exercise wear. Sporting-goods colossus Nike operates seven U.S. Nikewomen stores, its women’s concept. But both companies say they plan to open more stores.

Neither Brown nor Vollmer would reveal Lululemon’s financial details except to say that as the chain expands internationally, the Wilson family will fund growth partly through franchising. The chain’s big obstacle will be retaining its flavor as it grows, says Blake Hudema, president of Hudema Consulting Group, a Vancouver-based planning and development firm.

“It’s a challenge to jump into a country with zero awareness,” Brown said. Climate will be yet another issue; the Southern California stores, for instance, initially carried too much cold-weather clothing.

But where Lululemon has already opened, it is the “quintessential lifestyle store,” says Ian F. Thomas, president of Vancouver-based Thomas Consultants.“Everybody’s carrying a latte,” he said. “It’s a see-and-be-seen social parade.”