Chip Wilson

SANTA MONICA, Calif. — Lululemon founder Chip Wilson has the unauthorized scoop on the yoga pants empire credited with starting the ath-leisure craze.

The Vancouver company’s founder is peddling a tell-all, self-published book via Amazon titled “Little Black Stretchy Pants,” chronicling Lululemon’s start, expansion and Wilson’s critique of how the company’s been run in more recent years. From Wilson’s perspective, the company has some kinks to work out.

“On a board of directors in a public company, it’s like a good marriage,” Wilson said. “If a man and a woman can respect each other for what they bring to the marriage, then the marriage is really strong. But if only the man put down how the marriage is going to be or only the woman, there’s no synergy. There’s no one plus one equals three. So my thing with Lululemon right now is it’s just one [side of the equation].”

Wilson, who has a 13 percent stake in the business, originally got his start in the action sports industry, founding a company called Westbeach before going on to start Lululemon. In 2005, he sold a 48 percent stake in the business to Advent International and Highland Capital Partners. He contends he did not need money at the time and had brought on outside investors in a bid to gain advice and assistance on U.S. real estate. The company went public two years later and up until February 2015, Wilson was a member of the board. He hasn’t been a silent bystander, calling out the company saying it has lost its way.

Lululemon, with revenue for its fiscal year ended Jan. 28 up 13 percent to $2.6 billion, more recently saw a shakeup within its executive ranks with the departure of chief executive officer Laurent Potdevin in February. The reason for his departure was not made clear, with the company citing its code of conduct in a press release announcing the news saying Potdevin “fell short” of said policies. Former Sephora Americas president and ceo Calvin McDonald has been leading the company since July.

The story Wilson’s pushing is the classic creative versus finance tale commonplace within the fashion industry.

“That’s the idea of the book,” he said. “What I call old school people that are on the board that come in once a quarter and elect, they want a ceo who’s also metric-driven because they don’t know how to talk to a creative ceo. In my mind, a ceo should always be visionary and culture-first and then the coo should be that operator. But never put the operator on top.”

Wilson reflected on Lululemon while in Santa Monica, the final stop of his four-city book tour, before heading back to Vancouver. The day’s event included a yoga class followed by book signing in front of the Lululemon store at the Third Street Promenade. Wilson signed books and spoke with fans of the brand, standing barefoot in red shorts and a red-and-white striped shirt. The outfit was an idea of his son, J.J. Wilson, that had other men also dressed in the same red-and-white striped shirt (although wearing black shorts) with name tags reading “Chip” in a reference to “Where’s Waldo?”

The book is to serve as a living archive for Lululemon with the idea, Wilson said, to continue writing additional chapters to post on his namesake web site and also crowdsource from past or present Lululemon employees to add their own perspectives.

“The story’s never-ending and Lululemon’s a 1,000-year company so I think even 80 years from now people will be able to look and [see] what actually happened,” Wilson said. “I think, with us, we were so busy building the company, we never took any photographs. We never wrote the story. So, at some point, the press got to write the story for Lululemon rather than Lululemon writing the story for itself.”

That last point would be in reference to the various stumbles in the media that have dogged Wilson and the company at times, including the well-publicized recall in 2013 of Lululemon’s black luon yoga pants for being too sheer. Wilson’s comments in an interview on the matter drew ire when he said “some women’s bodies just actually don’t work” for the pants.

Wilson’s looking to the book to take back the story and reframe it around what made the business successful, something he said is rooted around a company culture he believes could have only emanated out of Vancouver and a lateral path that began when he first entered into the surfwear market. When that became oversaturated he went to skate and then snowboarding before entering the world of yoga.

Chip Wilson

Wilson leading a yoga class during his Santa Monica book tour.  Courtesy Photo

“The reason I had to keep shifting is because when I got into the surf business, it was Quiksilver and Billabong out of Australia that came here and then there was OP,” he said. “In the next five years it became probably 500 companies and it became a commodity product. In other words, there was too much product and too few people…Yoga was different because I changed the business model to be vertical retailing so I missed the wholesaler and that was very capital intensive and no other company could afford to do it or understand it at the time.”

While plenty of brands are chasing Lululemon, there’s a big gap between the company and everyone else. Gordon Devin, the ceo of the 10-year-old Spiritual Gangster yoga brand, told WWD last month, “In the world of ath-leisure, you’ve got the 800-pound gorilla, Lululemon, and you’ve got everybody else playing second.”

“When people compete against Lululemon, they really have to be able to do it on a straight commerce basis in order to drive a better quality product at a better price, but it seems like no one can make a pure e-commerce model work with a great brand,” Wilson said. “Amazon keeps trying, but it can’t. It hits the mass market where, to build a real brand, it has to have real value in it. As of yet, that doesn’t seem to be going through Amazon.”

Wilson thinks the wholesale business will continue to contract due to fewer consumers out there willing to buy and that same reason drives his thoughts around what happens to physical retail.

“The prices of space are coming down, which is going to create a whole different type of retailer that will come in,” he said. “So with Sears, you’re going to have virtual reality games, go-karting and vertical farming [tenants], where people will give their girlfriend a birthday present of vertical farming space inside what used to be Sears.”

Anyone selling a technical product that needs to be shown to customers — such as Lululemon, Tesla or Apple — will continue to nab real estate, Wilson said.

The entrepreneur cited what Adidas did with the Yeezy shoes and Canada Goose as interesting studies of brands doing things right, but said he considers himself a “technical guy” who mostly thinks about the future of clothing and what technology can be packed in. What does that look like? Wilson, is lucid in his idea of wardrobes of the future.

“My belief 20 years out from now is we may all be wearing Lycra suits, top to bottom. I think because of 3-D printing of food and nutrition, everybody’s going to be very fit and so there won’t be any stigma to wearing a tight Lycra piece,” he said. “You look at anyone in the Olympics, that’s how they dress for the most functional movement. So you have to think that that’s where it’s going. Fabric will be temperature-controlled. You could see the Apple Watch getting bigger and bigger and it’s going to be a flexible foam on your wrist with implants in your ears.”

It’s quite a vision and perhaps something so far out there the metric or operations people, as Wilson calls them, may not get it. However, his whole thing is one must think far out in order to create the future, accepting there will be flops along the way.

“What happens is once every three years in one quarter, the creative part won’t be successful,” he said. “In other words, if you’re pushing the creative end, it’s going to fail every now and then. The people that are the metric people, the operators, they’re always saying ‘Oh, that’s not going to work. That’s not going to work.’ That’s who they are because they don’t know how to create the future. What happens is a line will fail one quarter and then the finance people come in and say ‘Well, you messed up and we’ll come in because we know how to do it better.’ They put parameters on the creative end and the creative people never get it back.”

That’s perhaps related to one of the mistakes and lessons that still stick with Wilson today after all his years in business.

“I didn’t need the money, but when I took the money in, I made the mistake of not getting A and B class shares,” he said. “Under Armour and Nike, the founders there because they have that, they can control the board and they can have the right balance between metric and creative visionary people on the board. If you end up with all metric, then they think they’re creative and they come up with ideas nowhere near that. It puts you to sleep.”

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