By Chip Wilson
“One day in mid-2001, I gathered our staff together and told them, “Nike is our competitor.” Considering we had only $4 million in yearly sales, it was a crazy thing to say.”
Read on for the second publicly shared excerpt from my new book, Little Black Stretchy Pants—the unauthorized story of how I built lululemon, available tomorrow October 16th on Amazon, Audible and Kindle.
My first business goal was to have a single store and ride my beach cruiser to work every day. I had achieved that goal. My second business goal was to have five stores to enable an increase in quantity and drive down productions costs. My third was to compete against Nike.
As Syd and Alexandra got to work on opening in Toronto, I thought a little more about my own expansion plans. I knew that making an amazing product at a reasonable price would get a lot easier once we got to five stores and could take ad- vantage of economy-of-scale production. Eventually, I knew, making several times more of something and having enough space in which to sell it would work better for us—especially since I’d committed to never doing wholesale again.
I could see long-term success. I knew if we didn’t grow, Nike would figure out what we were doing, set up across the street, and put us out of business.
But the real reason to grow was our people. They were just ageing into the stage where they were thinking of marriage. They wanted a bigger possibility in their career and to take on more significant challenges. We all knew if the company grew, we could afford children and mortgages and schools. I felt I had an obligation to give them every opportunity to fulfill their lives.
One day in mid-2001, I gathered our staff together and told them, “Nike is our competitor.” Considering we had only $4 million in yearly sales, it was a crazy thing to say. My handful of staff didn’t know whether to laugh or run for the door.
As Delaney Schweitzer recalls, “There were fifteen of us in a room—the whole company—and Chip declared we would open three hundred stores, that we’d be across North America, and that soon we’d be mentioned in every board meeting at Nike. As crazy as that sounded, every one of us was like: ‘I’m in.’
“A few years later, we hired a production person from Nike,” Delaney continues. “He told us that the second he gave his notice and said that he was going to lululemon, they immediately had him escorted out of the building. At that point, Nike had created a small team to dig into the lulu- lemon story and understand our stores. They couldn’t figure out the connection we were making with people. When he said, ‘You’re on the agenda at Nike, they’re talking about you, they’re trying to figure you out,’ it was proof positive that Chip’s declaration had come true.”
Small as we were, we were united in the opinion we had a better product and business model than Nike. We were reaching the female market in a way Nike couldn’t because they did not have the culture. We were doing so well that I could envision if we didn’t expand, Nike could replicate our business. This was closely related to what I’d considered when taking Syd Beder’s offer. It was sobering to consider the demise of our company while the brand was still in its infancy.
I knew our staff were more than up to the challenge of growing lululemon. By that point, I’d paid for our core people to attend the Landmark Forum, and I’d seen them come back empowered and communicating in a way they’d never known before. They’d become people who were no longer willing to settle for mediocrity in their lives—or in the company to which they’d devoted themselves.
In fact, instead of targeting Nike as competition, it even occurred to me to model lululemon after McDonald’s and become a real estate company. Our stores were profitable enough to pay for their own real estate.
The possibilities were endless.