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58 · BUSINESS 2.0 MAY 2006

WHEN CHIP WILSON TOOK HIS F IRST

yoga class in 1997, the fashions on themats around him were abysmal. Every-one wore Lycra because it stretched, but

it was hardly flattering. As Wilson points out, “Lycra onlylooks good on you if you’re a 10 out of 10.”

In 1998 Wilson founded Lululemon Athletica to givethe clothes a makeover. His first step: devising a thicker,softer Lycra-nylon blend called Luon that wicks awaysweat. Since then Lululemon, based in Vancouver, BritishColumbia, 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 garagesFabric enclosures

for zippers prevent chafing.

2Flat seamsSmoother thread-

work means less irrita-tion while stretching.

Stretchingfor

SuccessLululemon reaches out to everycorner of its customer base to

design its popular yoga apparel. BY DIANE ANDERSON

continued

7 Smart DesignDetailsA close-up on some of Lululemon’s cleverest innovations.

60 · BUSINESS 2.0 MAY 2006

chafing. The company’s secret is a re-search and development process thatcatches ideas as they bubble up fromcustomers, yoga instructors, and em-ployees. Lululemon boutiques, too, actas idea incubators; the company has 36stores worldwide and plans to open 20more this year. “Most designers look atthe cosmetics and add gimmicks later,”says Wilson, now Lululemon’s chair-man and chief product manager. “Forus, design is the critical initiator.”

Many of Lululemon’s innovations—such as a seaweed-based fabric calledVitasea, which releases vitamins into theskin—appeal to athletes of all stripes, in-cluding runners and rock climbers, andof both genders. In fact, only a third ofthe company’s clothes are now pur-chased by yoga aficionados. That’s onereason privately held Lululemon hasdoubled both revenue and earnings ineach of the past four years, according toWilson, who says sales exceeded $60million in 2005. Last year he sold a 48percent stake in the company to two pri-vate equity firms, Advent Internationaland 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 ofLululemon’s items retail for $50 to$120—the company each year recruitsa 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 keepssuggestion forms near its fitting roomsso shoppers can offer opinions or drawpictures of features they’d like to seeadded. After several customers com-plained that Lululemon’s bras didn’tcater to curvy women, the company de-signed two new models—cheekily calledLetmeHOLDthose4U and Bounce Break-er—that are adjustable in just about everydirection. “We’re not afraid to hear whatwe should be doing,” says Andrea Mur-ray, a Lululemon designer. “If we needto, we’ll go back to the drawing board.”

Diane Anderson is a freelance writerbased in San Francisco.

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7Cuffins Extra flaps

double as mittensduring a run or enroute to the gym.

4Thumbholes Loops add

warmth and preventsleeves from ridingup during yoga.

3Silverescent fabric

X-Static uses silverions and crushedsilver to deter fun-gus, bacteria, andstench.

6Ponytail release

Holes in the backs of hoodies preventponytail bulk.

5Gadgetpouches

Pockets’ head-phone ports make iteasy to stow iPodsduring jogs.