The case traces the development of Lululemon Athletica (Lulu) from founder Chip Wilson’s first post-yoga euphoria in 1997 to the sale of all of his shares in 2015. Officially founded in 1998, Lulu was constructed from a proprietary elastic fiber based in her figure-enhancing “miracle” yoga pants. The case describes Wilson’s initial experience with functional technical clothing, which gave him the experience he needed to launch the Lululemon brand with its line of high-priced products and luxury women’s fashion design. The case also underscores the retail and promotional approach he made to Lulus’ first decade of success. The snapshot of the rise and spread of the Lulu brand cult provides the backdrop to assess whether the brand has already peaked or can continue the explosive growth that the sports leisure category has created. To aid in this decision, the case features two competitors as comparison slides (Under Armor and Athleta) to contextualize Lulus’s growth prospects. The Lululemon case underscores the importance of the competitive frame of reference in brand positioning and describes how this may differ for the three competitors. The case also allows us to discuss the challenges of maintaining the congruence of a private label with a diverse range of products. This battle is unique to retailers who always need to bring diverse product ranges (not just a single product line) under the umbrella of a single brand offering, and is particularly relevant for vertically integrated brands like Lululemon.
Alice M. Tybout
Alice M. Tybout
Kellogg School of Management (KE1010-PDF-ENG)
June 13, 2017
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