Never Discount the Dollar or the Brand

“The following are a sample of the operating principles (I have over three hundred) that were critical in guiding our rocket ship trajectory. My next book will outline the entire set. Operating Principles Samples OP: Every piece of lululemon clothing must be able to be put through a hot water wash and a hot dryer and continue to look new for five years. WHY? Athletes are busy, and they may want to wear the same clothing the next day. A hot wash and dry is quick and kills all bacteria. As part of our quality guarantee, we promise clothing will not shrink more than 2 percent after being washed hot water and dried in a hot dryer. HISTORY: Before lululemon, people would buy garments one to two sizes too big, so after a wash, the garments would fit. We decided to make clothing that would continue to look exactly the way it did on the day it was purchased five years later. OP: Our store pant and short boxes must carry approximately 60 percent black or black-equivalent pieces at all times. WHY? Our Guests purchase solid black about 80 percent of the time, but we only show 60 percent black in the store boxes, so the Guests see 40 percent of the stock in an item in multiple colours. Most Guests want the perceived freedom to choose a colour, and then buy black. We show enough colour for the customer to have a choice and to make the store vibrant. To keep the black level at 60 percent, the pant wall person needs to be responsible for scanning the pant wall ten times per day and keeping inventory levels perfect. HISTORY: We found that if we didn’t stock 60 percent black, and we didn’t restock throughout the day, we lost sales because we would run out of stock by two o’clock in the afternoon. The entire concept of the boxes is to know exactly what inventory is on the floor in relation to the back room. We may sell 90 percent black, but the Guest wants choice before choosing black. We merchandise to the psyche of the Guests. OP: All invoices are paid in seven days. WHY? With retail stores, the worst thing that can happen to us is not to get delivery of product on time. The first company to pay the factories gets the first delivery, the best seamstresses and tailors, and access to the best technology, all of which is critical to quality-control and innovation. HISTORY: With Westbeach, I never had enough money to pay on time. As a result, I often got delivery last, the least experienced seamstresses and tailors and was the last to be offered innovation. OP: Every dollar a garment is discounted takes $10 off the company’s value. WHY? Guests subconsciously attach more value to full-priced garments and correlate full price to a strong brand. HISTORY: Customers are trained by merchandisers (who are incentivized by short-term bonuses) to wait for sales and these customers psychologically discount the value of the brand. OP: We value our customers’ time as though they are making $100/hour. WHY? We assume our Guests make $100 an hour, and if they are delayed fifteen…”

“The Original lululemon Manifesto (2003) (these were the quotes on the side of the lululemon shopping bags) Coke, Pepsi and other pops will be known as the cigarettes of the future. Colas are NOT a substitute for water. Colas are just another cheap drug made to look great by advertising. Drink fresh water and as much water as you can. Water flushes unwanted toxins and keeps your brain sharp. Love. Do yoga. It lets you live in the moment and stretching releases toxins from your muscles. Your outlook on life is a direct reflection of how much you like yourself. Do one thing a day that scares you. Sunscreen absorbed into the skin might be worse than no sunshine. Get the right amount of sunshine. Listen, listen, listen and then ask strategic questions. Life is full of setbacks. Success is determined by how you handle setbacks. Compliments from the heart elevate another person’s spirit and will often result in an encouraging word for someone else—a domino effect. Write down your short and long-term GOALS four times a year. A class study at Harvard found only 3% of the students had written goals. 20-years later, the same 3% were wealthier than the other 97% combined. A daily hit of athletic-induced endorphins will give you the power to make better decisions and help you be at peace with yourself. Let SWEAT FLOW from your pores once a day to regenerate your skin. Jealousy works the opposite way you want it to. One hour of aerobic exercise will release endorphins to regenerate cells and offset stress. Wake up and realize you are surrounded by amazing friends. Communication is COMPLICATED. Remember that each person is raised in a different family with a slightly different definition of every word. An agreement is an agreement only if each party knows the conditions for satisfaction and a time is set for satisfaction to occur. Friends are more important than money. Live near the ocean and inhale the pure salt air that flows over the water. Vancouver will do nicely. Do not use cleaning chemicals on your kitchen counters. Try vinegar and lemon. Someone will inevitably make a sandwich on your counter. Stress is related to 99% of all illnesses. Don’t trust that an old-age pension will be sufficient. Do yoga so you can remain active in physical sports as you age. Observe a plant before and after watering and notice the benefits water can have on your body and your brain. You ALWAYS have a choice and the conscious brain can only hold one thought at a time. Utilize your freedom to choose. Just like you did not know what an orgasm was before you had one, nature does not let you know how great children are until you have them. Children are the orgasm of life. Lululemon athletica was formed to provide people with components to live a longer, healthier and more fun life. If we can produce products to keep people active and stress free, we believe the world will be a better place. DO IT NOW. The world is changing AT SUCH A RAPID rate that waiting to implement changes…”