1. CREDITTK
58 · BUSINESS 2.0 MAY 2006
W
HEN CHIP WILSON TOOK HIS FIRST
yoga class in 1997, the fashions on the
mats around him were abysmal. Every-
one wore Lycra because it stretched, but
it was hardly flattering. As Wilson points out, “Lycra only
looks good on you if you’re a 10 out of 10.”
In 1998 Wilson founded Lululemon Athletica to give
the clothes a makeover. His first step: devising a thicker,
softer Lycra-nylon blend called Luon that wicks away
sweat. Since then Lululemon, based in Vancouver, British
Columbia, has grown into a yoga powerhouse by churn-
ing out groundbreaking apparel with attention to tiny de-
tails, such as flat seams and zipper covers that prevent
WHAT WORKS BOTTOM LINE DESIGN
1Zipper garages
Fabric enclosures
for zippers prevent
chafing.
2Flat seams
Smoother thread-
work means less irrita-
tion while stretching.
Stretching
for
Success
Lululemon reaches out to every
corner of its customer base to
design its popular yoga apparel.
BY DIANE ANDERSON
continued
7 Smart Design
Details
A close-up on some
of Lululemon’s cleverest
innovations.

2. 60 · BUSINESS 2.0 MAY 2006
chafing. The company’s secret is a re-
search and development process that
catches ideas as they bubble up from
customers, yoga instructors, and em-
ployees. Lululemon boutiques, too, act
as idea incubators; the company has 36
stores worldwide and plans to open 20
more this year. “Most designers look at
the cosmetics and add gimmicks later,”
says Wilson, now Lululemon’s chair-
man and chief product manager. “For
us, design is the critical initiator.”
Many of Lululemon’s innovations—
such as a seaweed-based fabric called
Vitasea, which releases vitamins into the
skin—appeal to athletes of all stripes, in-
cluding runners and rock climbers, and
of both genders. In fact, only a third of
the company’s clothes are now pur-
chased by yoga aficionados. That’s one
reason privately held Lululemon has
doubled both revenue and earnings in
each of the past four years, according to
Wilson, who says sales exceeded $60
million in 2005. Last year he sold a 48
percent stake in the company to two pri-
vate equity firms, Advent International
and Highland Capital, and hired a vet-
eran Reebok exec to replace him as CEO.
Because highly functional and fash-
ionable clothes aren’t cheap—most of
Lululemon’s items retail for $50 to
$120—the company each year recruits
a number of yoga instructors as “ambas-
sadors,” who get free samples in ex-
change for regular feedback by e-mail.
In addition, each Lululemon store keeps
suggestion forms near its fitting rooms
so shoppers can offer opinions or draw
pictures of features they’d like to see
added. After several customers com-
plained that Lululemon’s bras didn’t
cater to curvy women, the company de-
signed two new models—cheekily called
LetmeHOLDthose4U and Bounce Break-
er—that are adjustable in just about every
direction. “We’re not afraid to hear what
we should be doing,” says Andrea Mur-
ray, a Lululemon designer. “If we need
to, we’ll go back to the drawing board.”
Diane Anderson is a freelance writer
based in San Francisco.
WHAT WORKS
CREDITTK
7Cuffins
Extra flaps
double as mittens
during a run or en
route to the gym.
4Thumbholes
Loops add
warmth and prevent
sleeves from riding
up during yoga.
3Silverescent
fabric
X-Static uses silver
ions and crushed
silver to deter fun-
gus, bacteria, and
stench.
6Ponytail
release
Holes in the backs
of hoodies prevent
ponytail bulk.
5Gadget
pouches
Pockets’ head-
phone ports make it
easy to stow iPods
during jogs.