Kit and Ace has a problem on its hands.

The Canadian apparel firm is hoping to open a store in the Hayes Valley area of San Francisco, and could know its fate Wednesday evening.

Representatives from the company will be speaking at a hearing before the City Board of Appeals asking it to uphold a City Zoning Administrator’s determination that Kit and Ace doesn’t qualify as “formula retail.” The local Hayes Valley Neighborhood Association is objecting to the store’s opening and wants to keep Kit and Ace out.

Kit and Ace is a start-up founded by JJ and Shannon Wilson, son and wife of Chip Wilson, founder and former chief executive officer of Lululemon Athletica.

According to JJ Wilson in a telephone interview, the company had fewer than 11 stores at the time it filed its original permit for the site. Surpassing 11 stores seems to have garnered special attention from the neighborhood association.

He started a Web site called nokitandace.com as an information vehicle to showcase how Kit and Ace is not a nationwide chain that follows traditional formula retail.

But how formula retail is defined is likely the key to the dispute. The Hayes Valley district has a strict code for retail shops in the neighborhood that suggests the district could be favoring local mom-and-pop shops.

Wilson’s tactic in his fight focuses on how Kit and Ace does as much work with local artisans and craftspeople as a local merchant might for its mom-and-pop store.

Wilson, who said Kit and Ace is about experiential retail, works with local craftspeople to work on its stores. That could include at least a 30 percent build out of the new shops; commissioning one-of-a-kind objects for its stores, whether it’s display tables or lighting fixtures, and featuring a wall in the space dedicated to showcasing the work of a local artist. Wilson said the displays are rotated out every three months.

According to Wilson, the shops periodically host local supper clubs as a networking base to bring community people together. Local vendors such as florists and winemakers are hired, and the company partners with local emerging chefs and entrepreneurs to showcase their talents.

Wilson also said many shops, and the Hayes location is slated as one of them, work with young apparel designers. “We have sewing machines in the shops where they can get creative,” he noted, explaining that the program is structured in the shops where they exist as internships.

“I feel that what we’re doing is equivalent to what any local merchant is doing in Hayes, if not beyond,” Wilson said.

Wilson said he hasn’t decided what he will do if the City Board rules against Kit and Ace. “I don’t want to force myself anywhere. I’m just trying to enroll [the neighborhood association] and get them onboard,” he said of the nokitandace.com site.

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