How Lululemon kept its cult

Case: Leadership, Culture, and Transition at lululemon

Key takeaway: Figure out how to bring the founders into a strategy rather than alienating them. 

What happened? On December 11, Lululemon announced its third-quarter fiscal results. Between August to November, the retail company generated $33 million, increasing its net revenue to $916 million in 2019. Much of the 21-year-old brand’s transformation is credited to former CEO Christine Day, who leveraged her experience in expanding the Starbucks brand worldwide to align with Lululemon’s model. 

Day replaced founder Dennis “Chip” Wilson in 2008, and she stepped into her role facing many problems: Outperforming stores, hefty investments in low-demand locations, and poor workflow between teams. 

She convinced the founders to attend management programs at Harvard and Stanford so they could better understand how the company must change. Day nearly tripled her team from having 2,683 employees in 2008 to 6,383 in 2013, all while she redesigned the company’s structure, according to Pitchbook data. In five years time, she turned Lululemon into an athleisure powerhouse. 

Day stepped down as CEO in 2013 after a series of quality control issues with the clothing, Business Insider reported. She is now the chief executive at Luvo, a frozen food company. 

Thanks to Dr. Jennifer Chatman, the Paul J. Cortese Distinguished Professor of Management  at UC Berkeley’s Haas School of Business, for her suggestions.