Little Black Stretchy Pants by Chip Wilson

Author:Chip Wilson [Wilson, Chip]
Language: eng
Format: epub
ISBN: 9781732747319
Publisher: Time is Tight Communications Ltd
Published: 2018-10-16T05:00:00+00:00

Chapter 18:

The Business of Family

Big News

In early 2003, Shannon and I found out we were going to have a baby of our own. As the news settled in, I felt a tremendous amount of satisfaction with my life. With Shannon as my partner, we had grown a business from nothing. Now, that business was set to provide for the family we were creating.

Shannon was lululemon’s phenomenal designer. In fact, a few months earlier, the owners of Roots had come into our store, asking who our designer was. “My wife,” I told them, and that was the end of that.

Shannon also provided design continuity for the brand, her work representing our original intent. Having a child might lessen Shannon’s involvement in our operations and successful formula, but by then we’d hired and trained great people underneath her (Andrea Murray, Cassandra Tse), and had tried to mitigate against her inevitable absences.

Things at lululemon were going exceptionally well. As an entrepreneur, it’s sometimes hard to believe you’ll ever have a company that’s bringing in enough money to create a rainy-day fund, but lululemon was now in a place where it would do just that. I paid off the debt I had taken on our house. That meant Shannon and I could start our family without financial worry and stress.

Partnering with the Hons

Meanwhile, the lululemon concept was translating smoothly across our locations. The success of the five Canadian stores confirmed we could thrive while doing business our way.

We’d put into place an exclusive manufacturing deal with my friends Frankie and Elky Hon. Their Vancouver factory was working at 80 percent capacity, and they were always scrambling for business. I made them an offer. I said I would guarantee 100 percent production with one fabric for 50 percent of their business.

My 50 percent of the manufacturer’s profit meant I had eliminated yet another middleman. When great factory people like Frankie and Elky do not have to look for business and can focus on efficiency, amazing work can occur. We ended up making $2 million a year profit on the factory, and I continued to build a deeper and wider moat to protect against future competition.

As Frankie says: “We started with very small orders, a hundred pieces at a time. Then Chip’s business bloomed crazily, and Chip suggested an exclusive partnership with us.” Much like my relationship with Josephine Terratiano, my relationship with the Hons grew organically, and, to this day, they’re like family. Eliminating two middlemen by owning our manufacturing and our own stores was a key reason for lululemon’s rise to greatness.

Around the time of this partnership, a man named George Tsogas came in as a consultant to look at our inventory, distribution, and overall logistics. “When I first walked into the office,” says George, “all I remember is this big West Coast dude sitting on a yoga ball, shirtless, in board shorts and flip-flops. His first words were, ‘You’re way too serious, do not wear a suit again to this office.’ That was my first taste of Chip’s unique culture.

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