by Cristina

Lululemon Q1 2015 in Context

June 10, 2015

Lululemon had quite an interesting first quarter which wasn’t quite captured in the Q1 Earnings call yesterday morning. I listened to it and got some interesting information in regards to the 2015 Lululemon Warehouse Sale which I casually shared yesterday, and Lulu Addict did a really great job of preparing digestible highlights of the call for you this morning if you are interested in reading up about upcoming product plans. Here is the actual transcript of the call which is a pretty boring a dry read. Be forewarned! Lululemon Q1 2015 Earnings Call

Instead, I’ll share with you some of the interesting background goings on of the company over the past few months that I’ve observed, read about and been informed about – and maybe I need to be corrected on some details (feel free to do so anonymously in the comments or further elaborate on what is going on). There has been a pretty big shuffle up at the SCC with philosophical changes in the company trickling down to store level, and executive team clashes with long time senior staff. The result of the proxy war with Chip Wilson and the board last year was that the board reached a settlement where they promised to have an independent party review governance policies and board makeup and voting systems. That hasn’t happened. Read this Financial Post article for more interesting and detailed insight on that. Around this time, Delany Schweitzer left the company and John Currie retired

Lower down the totem pole, I noticed about 5-6 months ago that certain iconic senior SSC staff where suddenly leaving the company. These are faces we recognize from the lululemon blog that have been with the company since the very beginning and worked their way up from store educator to SSC staff. A well known stylist suddenly left,  the very talented guy they hired to do color got poached by another bigger competitor.  I questioned someone I know who had also suddenly left after having been recently promited and that person told me that there was a lot of unhappiness and tension at the SSC with tons of changes happening that not everyone was fully comfortable with it – and a lot of store level stress. A lot of that probably had to do with morale and uncertainty, or hedging their bets. About 5 weeks ago there was another staff movement (euphemism for layoff or resign) which really peaked my interest in what was going on. I know a lot of people have probably left for their own personal reasons and the lululemon political stuff was just a small fraction of that but it is interesting none the less. Many talented people have moved over to Kit and Ace to follow the Wilson’s family newest pursuit. In fact, Kit and Ace which opened it’s first store last summer is largely populated by former lululemon employees.

I’ve been told that the executive team is really ‘cutting the fat’ and redistributing finances and making big changes at the store level. More customer friendly investments. Mainly, they are resolved to being customer centric and treating customers really well. I also heard on the earnings call that there will be a website upgrade very soon which is a big and necessary investment. We’ve noticed this new customer first attitude in the much more relaxed return policy. Also, there is a much less ‘elitist’ feel to stores which I think makes for a better working environment

To rally the troops and re focus employees with the new order (and probably boost morale), Lululemon kicked off a world tour party for their employees last week called Get Quiet Live Loud (which they’ve trademarked). This was a motivational party with a bit of swag involved and some swanky prizes. I’m pleased to see that employees are being splurged on in this new growth period and invested in.

Overall, I think change can be pretty scary and very disruptive but it is the only way to evolve into something greater. I am actually very excited about the direction the company is headed and the clear intention. Very sad to see familiar people move on but they’ll do great things as they are very talented, and Lululemon is on track to go full steam ahead. It is so weird to me that in my time blogging I’ve seen senior staff go, new staff come in and many stages of transition and strife….and here I am still blogging about it all in the context of the other side. The fan community side of things which happens completely independently of the company and exists in it’s own ecosystem. 

Here are some social media photos of the event because long wordy posts without pretty pictures are boring. You can check it all out under the #getquietliveloud tag, just click on the highlighted blue hashtag in one of the images below. Instagram changed yesterday and it is much more desktop browser friendly. 

I have a feeling this is going to be the start of something great #lululemon #GetQuietLiveLoud #choosehappiness

A photo posted by kirstenklee (@kirstenklee) on Jun 6, 2015 at 9:08pm PDT

“the only people for me are the mad ones, the ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones who never yawn or say a commonplace thing, but burn, burn, burn like fabulous yellow roman candles exploding like spiders across the stars.” Jack Kerouac, On the Road 16 cities. 5 countries. 10,000 strong. It begins inside. #GetQuietLiveLoud #stretchyourhead #ontheroad #spreadlove #wishiwasdrivingthevan #luonthroad #firststopYVR #kerouac #amazingpeeps #missmyfamily #explore #adventure #thesweatlife #bonfire #meditation #hellyes pc: @jonny.picture

A photo posted by Duke Stump (@skratta) on Jun 8, 2015 at 4:06pm PDT

stoked on this brand book 👌🏼 @lululemon creative team doing big things #getquietliveloud

A photo posted by Malin Otmalm (@malinotmalm) on Jun 6, 2015 at 9:30pm PDT

Nicely done lulu! #getquietliveloud

A photo posted by Uday Ch (@udaych) on Jun 6, 2015 at 5:45pm PDT

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