Lululemon’s CEO Calvin McDonald Reflects on the Company’s Success (2024)

Calvin McDonald just got back from China.

The chief executive officer of Lululemon Athletica was in Shanghai to meet with the local Lululemon team, but decided to do a half Ironman while there. He finished in 100th place out of more than 900 people, completing the triathlon in four hours, 42 minutes and 11 seconds. (The average time is closer to six hours.)

McDonald’s Instagram feed shows him in Hawaii only a week earlier completing another Ironman. And a 75-mile bicycle ride in Whistler, Canada, the month before that. And a half marathon in Vancouver, British Columbia, home to Lululemon, the month before that. In every photo he’s decked out in head-to-toe Lululemon.

“That’s one of the cultural elements of Lululemon,” McDonald told WWD over the phone from Vancouver. “Not just do we talk about the Sweatlife, not just do we want to create it as a vision. But culturally, we live the Sweatlife. And we’ve always said, we’re athletes designing for athletes, trying to find solutions and use products to create that.”

That firsthand knowledge might be why the athleisure apparel company, which began by selling yoga pants to women, has grown so rapidly and so extensively.

Today, after 21 years in the business, Lululemon is involved in nearly every facet of the “Sweat Life,” selling performance and ath-leisure apparel for both men and women, accessories, fashion pieces, including collaborations with names such as Robert Geller and Roksanda Ilinčić, personal-care products catered to the Sweatlife (think deodorant, dry shampoo and lip balm) and is pushing international growth. There is also talk of footwear, expanding the assortment of bras and water-proof wool. The latter is coming this fall.

“Our guest now looks to us for whole body solutions,” said Sun Choe, chief product officer at Lululemon.

Meanwhile, while other retailers continue to shutter stores, Lululemon is on track to open between 15 and 20 new locations in North America this year, along with stores abroad in China, Singapore and Paris.

In July, the company opened a 20,000-square-foot store in Chicago. Aside from offering Lulu’s signature women’s yoga pants — still the company’s number-one seller — the location has space for yoga, meditation, a café and an expanded selection of men’s wear, in categories like run and train.

The company’s stock is up, too — more than 51 percent in the last year. Revenues jumped 22 percent to $883 million during the most recent quarter and the company’s market cap is now valued at more than $26 billion.

Then there are the “Sweatlife Festivals,” popping up around the globe in places like Paris, London, Berlin and Shanghai.

“I don’t believe our success has been purely driven out of a particular trend in fashion,” McDonald said. “It really is driven out of a philosophy of health, wellness and fitness. And we’re playing a very unique position and point of view in that space through the Sweatlife. I don’t see that getting out of style and I don’t see health falling out of style.”

Last April, during the Lululemon’s Analysts’ Day in New York, the retailer unveiled its five-year growth strategy, which included doubling the digital business and revenues in men’s wear over the next five years, while quadrupling international revenues.

“As a whole, the Lululemon management team is focused on taking the business to the next level,” Choe said. “We are focused on our ‘Power of Three’ growth pillars — product innovation, omni-guest experience and market expansion — as the centerpiece of our five-year plan to increase value for our shareholders, guests and employees. The focus on men’s and product innovation across women’s, accessories and men’s is incredibly important.”

All of this is why Lululemon is being honored at WWD’s CEO Summit as the Best Performing Fashion Company — Large Cap.

“And we’re in the early innings of our own potential,” McDonald said. “Both in terms of product offering; in terms of our unique view around experiential and what it means today to be an experiential retailer.”

McDonald and Choe were both in Manhattan for the annual CEO Summit. But they’ll likely find time to work out while here. (McDonald said he works out every day. Sometimes twice a day.) Although he’s clear that you don’t have to be an athlete to work at Lululemon.

“But I think people who are drawn to the vision and the purpose of the organization are the employees who are attracted to want to work here,” McDonald said. “It’s not a prerequisite. But it’s sort of a self-selection process. When we go out to markets, we spend time in studios. We sweat together as employees.

“Our intent is that we want to unleash the full potential within every one of us,” he continued. “And we do that by igniting a community of people who want to live the Sweatlife.”

The continuation of the ath-leisure trend and comfort movements have added to the hype. So have consumers’ increasingly busy lives.

“Women and men are always moving through their environments,” said Audrey Reilly, senior vice president of women’s design at Lululemon. “We’re all transitioning from the minute we wake up in the morning. So, we understand what it means to go to bed, go to the gym, go and sweat and then actually get to your workplace. And then, from your workplace, get to a place for social. We’re there every day of the year. We really believe in this wardrobe from a.m. to p.m.”

Choe called these “sweaty pursuits,” and added that Lululemon is constantly innovating for products that are both polished and comfortable. The company does this through its innovation labs, dubbed Whitespace, and “the science of feel.” Or, more simply put, how the clothes feel when you touch them throughout the day.

“Our product is designed with three factors in mind: feel, function and aesthetic,” Choe said. “Our people live and breathe the Sweatlife, Lululemon’s holistic approach to building happy and healthy individuals and communities through sweat, relationship building and personal development — which is unique to Lululemon and differentiates us from competitors.”

It’s no surprise then that MBLM, a marketing agency ranked Lululemon as one of the top apparel brands that consumers form an emotional attachment to in its “Brand Intimacy 2019” study.

But these days, even fashion is taking a cue from Lululemon.

Ilinčić, the London-based, luxury couture fashion designer who unveiled her collaboration with Lululemon in October, said she was drawn to working with Lululemon because of its functionality.

“Lululemon doesn’t create a single piece that doesn’t have a particular function,” Ilinčić told WWD while at the launch party for the line in New York City. “Everything needs to be there for a reason.”

The Roksanda x Lululemon Inner Expanse Infinity Coat, for example, has 26 features, including a lipstick holder inside the jacket.

“Fashion is very much talking to women; it’s sheltering women. It’s protecting women,” she said. “And Lululemon is exactly doing everything in the same way, but in a slightly different world. We’re mixing high and low, effortless and couture.”

While the company’s growth plan seems unlimited, there have been a few headwinds. In September, Lululemon said it was planning on closing its remaining seven Ivivva stores, the kids business, sometime in 2020 in order to focus on other areas of the business. Lululemon had previously shuttered about 50 Ivivva stores in 2017, moving the business primarily online. The decision to close the remaining stand-alone stores means any remaining Ivivva products will be phased out.

McDonald said this is part of Lululemon’s plan to stay relevant and on brand with its core consumers: athletes.

“We’re seeing great growth in our core,” he said, but added, “There’s also areas that we’re being pulled in, versus pushed in. And that’s what’s super exciting.

“When we look at the opportunity, it is broader and bigger than just the ath-leisure and sporting apparel market,” McDonald said. “We really look at the health and wellness market and what’s happening in a broader context. We’ve identified a number of areas that we can play, not just with categories and category expansion, but as I mentioned, other areas that are associated with the Sweatlife.”