1. As a manager at Lululemon, what management functions would repair the damage that has been done to the brand, and help the company to move forward?

2. How was Chip Wilson’s management so successful in the beginning of Lululemon’s development, and so detrimental to the organization in recent years?

3. Lululemon has had difficulties in the uppermost levels of management (with Chip Wilson as CEO, and Sheree Waterson as chief product officer), and yet other levels of management within the organization are continuing to perform, allowing the company to increase sales to $2.1 billion in 2015. How is this possible? Describe how each level of management contributes to Lululemon’s operational achievements.

Since its creation in 1998, Vancouver-based Lululemon Athletica has taken the yoga and athletic apparel world by storm. The company was founded by Canadian entrepreneur Chip Wilson when he noticed how little selection there was in athletic clothing for yoga enthusiasts. Wilson used his knowledge of fabrics commonly used in surfing and snowboarding and spent nearly two years developing “Luon,” a unique fabric that feels like cotton spandex but is able to wick away sweat while still remaining relatively dry. Luon is the basis for Lululemon’s signature pants as well as the majority of the company’s functional and fashionable yoga-inspired clothing. 

It soon became apparent that yoga lovers were not the only ones interested in Lululemon apparel. As athletes from various fields discovered the brand, its popularity soared and Lululemon quickly garnered a cult-like following among those who welcomed the unique line of clothing and the company’s Zen-like approach to business. In 2016, there are 354 retail locations throughout North America and Asia, and the company reported sales of $2.1 billion for 2015.

Lululemon’s unparalleled success has not come without controversy: In 2007, the company came under fire for false advertising by the Competition Bureau of Canada, and was required to remove all advertising of the many health claims made for its seaweed-based fabrics. In 2013, concerns regarding the product quality of its black Luon fabric forced the recall of approximately 17 percent of all women’s pants sold by the company. This recall significantly hurt the company’s financial performance, both in terms of sales and share price, and critically damaged the brand’s reputation, ultimately resulting in the resignation of Chief Product Officer Sheree Waterson.