It’s been a decade since Chip Wilson was pushed out of his yoga-inspired fashion brand. The billionaire, who dumped most of his stake in a move that cost him up to $13 billion, is still searching for a new legacy – backing another sportswear company, investing in real estate and racing to cure a rare disease.
Category
🛠️
LifestyleTranscript
00:00 (upbeat music)
00:02 - We're here with Chip Wilson today,
00:12 the founder of Lululemon.
00:13 Thank you very much for joining us today, Chip.
00:15 - My pleasure, Jemima.
00:17 - So most people probably know you as, you know,
00:20 the founder of Lululemon,
00:21 one of the most successful apparel brands of our day.
00:25 But we're here today to talk about something different,
00:28 which is the organization that you've launched last year,
00:31 Solve FSHD.
00:33 And you launched it because you were diagnosed
00:37 with this rare form of muscular dystrophy a few decades ago.
00:42 I think a lot of people don't really know much about FSHD,
00:45 so I thought it could be useful to kind of start
00:47 with your story of getting diagnosed
00:50 and how the disease has impacted you.
00:53 - I mean, thanks for having me, first off.
00:55 This is, I mean, whatever you, I can do
00:59 to get the story out there in order for more people
01:01 to be recognized, especially when they're young
01:03 with muscular dystrophy, that would be great.
01:06 It is a different, there's different forms
01:07 of muscular dystrophy.
01:08 I mean, there's the chains, or even ALS is another one.
01:12 I have FSHD, vascular, scapular muscular.
01:16 So a lot of people that have mine
01:17 have no muscles in their face, so they have no expression.
01:21 So it makes it very difficult,
01:22 but mostly it hits the scapular muscles
01:24 in the upper body.
01:26 When I was young, I was a swimmer,
01:29 like probably a world-class swimmer
01:32 and in butterfly and backstroke,
01:34 but I could not swim freestyle
01:36 'cause I couldn't get my arm out of the water
01:38 every time I would do it, 'cause I had no scapular,
01:41 my elbow would collapse into the water,
01:43 but it didn't really mean anything.
01:44 I didn't think much of it.
01:46 But when I got to be 32 years old,
01:49 I had a bad back, and I went to the doctor,
01:53 and he stripped me down, and he looked at my body,
01:56 and I had these massive legs
01:58 and this kind of spindly upper body.
02:00 And he went, "I think you have something."
02:02 He did the blood test, et cetera,
02:03 and so I had muscular dystrophy.
02:06 So, of course, I wouldn't deny all about it.
02:11 I mean, I was physically great.
02:12 I felt good.
02:13 My back was really bad, and I guess
02:15 with vascular, scapular muscular dystrophy,
02:18 you get a sway back as part of the diagnosis of it all.
02:23 So, yeah, so, but relatively, I had just figured out,
02:28 okay, well, if I can't swim anymore,
02:30 then maybe I can run.
02:33 So I started becoming a 10K runner, that type of thing,
02:36 and then I started hurting a little bit more,
02:39 and my legs became a little unbalanced,
02:41 but I figured that I could start going side to side,
02:44 so I started playing squash.
02:46 And then-- - Improvised.
02:47 - And then, yeah, and then people figured out
02:49 they could hit the ball over my head,
02:51 and I couldn't reach it,
02:52 because I can only reach to here as I go up,
02:54 so people figured they could lob the ball and win,
02:57 so that became not very interesting.
03:00 So I kept morphing as I kind of go along,
03:02 and now, funny enough, I'm playing tennis,
03:05 and with, you know, but I get a coach,
03:07 and I can't hit it so much over my head
03:09 if I go side to side.
03:11 It's, I've been very fortunate,
03:13 because a lot of the indications are,
03:15 is that not only do I have a genetic makeup that's wrong,
03:20 you know, these repeats of part of that DNA,
03:24 but I have this thing called methylation,
03:27 and the methylation has to do with inflammation
03:29 and the way that the DNA is expressed.
03:33 So the interesting thing is by,
03:35 they say by athletics,
03:37 is actually represses the methylation,
03:41 so instead of being in a wheelchair,
03:43 and my teenagers are stumbling around and falling,
03:46 probably the athletics of my life
03:48 has probably repressed that,
03:49 which is why it's,
03:51 I've been able to grow into,
03:53 like I'm 68 years old now,
03:55 and still be relatively okay,
03:58 although I have, every time,
03:59 every step that I walk,
04:01 I have to be very conscious of where my foot is going,
04:04 and I can see that in about seven years,
04:07 I'll be in a wheelchair,
04:09 and so my goal is I'm gonna be,
04:11 I'm in action to do something.
04:13 - And so it's a genetic disorder.
04:15 Were you aware that it was in your family,
04:17 or it was news to you when you were?
04:19 - No, and I actually, at one point,
04:22 had my family tested,
04:24 and nobody had it,
04:25 so they thought it was just a genetic mutation
04:28 that happened like randomly,
04:29 which of course happens in genetics,
04:32 but as it's turned down,
04:33 it actually is in my family,
04:35 now that testing's become better and better,
04:38 but a couple of my children have it,
04:41 but they don't have any methylation whatsoever,
04:45 so consequently, you have to have these two
04:47 that come together,
04:49 so yes, they could pass it down,
04:50 and they really would have to marry,
04:53 'cause I have five boys,
04:54 they'd have to marry a woman
04:55 that had kind of the right genetic structure,
04:58 which probably happened with my parents,
05:00 that would then express that,
05:01 and that's pretty rare.
05:02 - And so tell us about Solve,
05:06 and why you decided,
05:08 you were diagnosed when you were in your 30s,
05:11 it's been a few decades since then,
05:14 and you decided to start Solve last year,
05:17 is that because of the kind of impending threat
05:21 of potentially losing use of your legs
05:25 in the near future,
05:26 or I'm interested in the timing
05:28 and the thought process behind starting Solve last year.
05:32 - Yeah, a lot of it is getting my head out of the sand,
05:34 I know there's other analogies I could probably say,
05:37 but about 10 years ago,
05:41 a partner of mine, Neil Camarta,
05:44 he was the CEO of Shell Oil in Canada,
05:48 he also has it,
05:49 and his whole family has it,
05:50 and they have it quite severe.
05:53 He came to me and he said,
05:55 "Look, there's this company happening
05:56 "over in the Netherlands,
05:58 "and we should probably get involved with it."
06:01 The Netherlands is interesting,
06:03 because the Royal Family in Netherlands has it,
06:06 and so they started many years ago
06:08 putting money and research into it,
06:10 so Leiden in the Netherlands
06:11 became kind of the world center for it at the time.
06:14 We went over and we put money into it,
06:16 we have a world-class board of directors,
06:18 because if your family has it,
06:20 you want to do something with it,
06:21 so we ended up with many world-class CEOs on the board,
06:25 either they had it or their wives had it,
06:27 but their children,
06:28 and we put maybe $40 million into it
06:32 over maybe about six years,
06:34 but nothing was happening.
06:36 And so I kind of sat back,
06:39 and I started getting involved with Peter Diamandis,
06:41 and the X Prize,
06:43 and he has multiple different ones,
06:46 to space or with Elon Musk in carbon capture,
06:49 oil recovery, that type of thing,
06:53 and I started looking at this concept,
06:55 and putting out a $100 million prize
06:58 brings every scientist and every thought process
07:01 in the world towards it.
07:03 I mean, people that aren't even looking at muscular dystrophy
07:07 but are maybe doing something
07:09 in another part of science goes,
07:11 whatever I'm doing, I can actually apply it to this.
07:15 So that's kind of the thing,
07:16 people come out of the woodwork,
07:18 so I went, okay, what can I do to be in action about this?
07:22 So we kind of got out of,
07:24 we let Fasio go in the Netherlands,
07:29 and we decided we were gonna set up, solve FSHD.
07:33 So Neil and I decided that we were,
07:35 because we are so close in age
07:39 and the progression of our age and our muscular dystrophy,
07:43 we don't have 20 years to figure this out.
07:47 One of the successes I've had in the progression
07:50 of surfskate, snowboarding, yoga, and now outerwear
07:53 is I've been very goal-oriented.
07:56 So I noticed that when a goal is set,
07:59 I make and the people around me make different decisions
08:03 based on the risk profile,
08:05 the amount of money put in,
08:06 and the risk to get to the goal by a certain time.
08:09 So our decision was then to make a goal
08:12 that we were gonna solve this FSHD by December 31st, 2027.
08:17 So what does that happen then is that people know
08:21 that there's a deadline to do something by,
08:24 and even everybody that's involved in this
08:27 coming out of the woodwork is going,
08:29 okay, how much money do I need?
08:31 How many people do I need?
08:32 What kind of facilities do I need?
08:34 And what kind of risk am I gonna take
08:36 in order to get this happening by December 31st, 2027?
08:40 So instead of now having one company
08:43 out of the Netherlands doing it, Fasio,
08:46 there's probably 30 companies globally
08:49 that are in one way or another looking at FSHD,
08:53 and that's what the $100 million has done
08:56 and the publicity of that.
08:58 And thanks for helping me out today.
09:00 - Yeah, I think something that I found really interesting,
09:02 I've been speaking to some of these scientists
09:05 that are working on the potential therapies
09:07 and hopefully cure, is that they had these technologies
09:12 or they had this research that could have been applied
09:15 to this a while ago, but because it's a rare disease,
09:19 there isn't as much economic incentive
09:21 for drug companies to develop treatments
09:24 because it doesn't go to as many people.
09:26 And so you coming in and putting this money on the table
09:30 frees up people to finally research this.
09:34 It kind of made me think,
09:35 how many diseases are there out there,
09:37 rare diseases where somebody could just come in
09:40 and put a bunch of cash on the table,
09:42 like a billionaire like yourself,
09:43 and the problem is solved?
09:46 Has it kind of made you think about
09:48 the justice of drug development
09:51 and the economics of it all in terms of
09:54 there's a lot of solvable issues just sitting out there,
09:57 we just don't have the resources?
09:59 - Well, I think for the big ones,
10:02 you can look at cancer or heart disease or that.
10:05 I think that's where governments get involved.
10:07 They're gonna get, if you have to build a highway,
10:09 the governments are gonna get involved
10:11 to build a big highway, but they're not gonna get involved
10:14 to build a back alley in a piece of property
10:17 they don't own.
10:18 That's, in order to have that happen,
10:20 you have to have private money in.
10:22 I think for, FSHD is rare, but not so rare
10:27 that if a solvent, a drug, can easily bring in
10:30 two to three billion dollars into a pharmaceutical,
10:34 and I think that's what people are seeing.
10:36 Part of it is us being able to tell the story
10:39 about how many people there are,
10:41 but I'm gonna tell something I think is kind of interesting,
10:44 is that when I was young, there was,
10:48 out on the playground or in phys ed class,
10:50 there was always the one fumbling kid
10:53 who just was uncoordinated or couldn't run very fast
10:57 and always got picked last on the teams,
10:59 and that, it could very well be
11:01 that that child had muscular dystrophy.
11:04 And so how do we then work with the health officials
11:09 in schools and the phys ed teachers
11:10 to start identifying these people
11:12 and start having them identified?
11:17 Because the younger, you can almost get anybody
11:20 in any disease, or the sooner they have it,
11:22 then the easier it is to work with people
11:24 around physical fitness.
11:27 Diet has a lot to do with it,
11:29 I think mental well-being has a lot to do with it.
11:32 So that's in part of the aura of saying,
11:37 okay, there's a lot more people than we know of,
11:40 and that gives a lot of incentive
11:42 to the pharmaceutical companies
11:43 in order to have something occur.
11:45 - And so you talked about goal setting,
11:48 and I have noticed you love to be like,
11:51 okay, we're gonna do this by this date,
11:53 we're gonna do this by this date.
11:54 You do it with your philanthropy,
11:56 you've done it with Solve, the companies you've built.
11:59 The scientists that I've been speaking with
12:03 are thinking that 2027, a cure by 2027 is a tough timeline,
12:08 but certainly therapies that will help slow down
12:14 the muscle degeneration or help regenerate muscles
12:17 should be viable by then.
12:20 I'm interested in,
12:21 do you think you're an optimistic goal setter?
12:23 Do you think you're a realistic goal setter?
12:25 Do you think you're a shoot for the moon,
12:26 land on the stars kind of guy?
12:28 I'm interested in how that reflects
12:31 your approach to business.
12:33 - That's a great question.
12:34 I think a lot about it.
12:36 And there's things called smart goals,
12:39 when in that smart goals is that A is achievable.
12:43 I actually like to set my goals
12:45 so I fail about 50% of the time.
12:48 And I really coach young people to do this a lot
12:50 because I think that we live in a world now
12:53 of there used to be helicopter parents,
12:55 now there's lawnmower parents.
12:57 And kids are like babied and they don't get to fail,
13:00 they don't get resilience,
13:01 they don't learn how to move forward.
13:04 And so in my companies,
13:05 I actually encourage people to fail 50% of the time
13:09 because even myself, I'd say I'm only successful
13:12 because I probably make the right decision 70% of the time.
13:16 So, and so I fail.
13:18 And so what happens when you fail,
13:20 when you just get up and you reset, you refigure it out,
13:24 what did I need to do to make this successful this time
13:27 and set a new conditions of satisfactions
13:30 with a new specific buy when date to get it done.
13:33 - Makes sense, 50%, that's a fair sentence, right?
13:37 And so you're still the largest individual shareholder
13:40 in Lululemon.
13:41 - That's right.
13:42 - But you've been busy with a lot of other things
13:46 since you kind of stepped away
13:48 from a formal role in the company,
13:49 including in the past few years,
13:51 you invested in Amor Sports,
13:54 which owns a bunch of brands,
13:56 Arcteryx and Wilson and many others.
14:00 You've also been a pretty big real estate investor
14:03 in Vancouver and Seattle.
14:05 And you have a private equity as well.
14:09 So I'm interested in, since over the past years,
14:13 since you haven't been active in Lululemon management,
14:18 what have you found to be your most interesting work
14:22 and what's been the most interesting thing for you
14:25 and your biggest accomplishment?
14:27 - So I've come out of Lululemon
14:33 because everyone told me to diversify,
14:36 like something bad could happen
14:38 and you have got too much money in one thing.
14:41 And so I listened to smart people and I did that.
14:47 So what things do I want to diversify myself in?
14:51 Well, as I was selling down Lululemon,
14:54 I was going, this is the only thing I think about
14:56 all day long is technical athletic clothing.
14:59 What a mistake I've made actually selling down
15:02 and getting out of the company
15:03 that I know more than anybody else in the world about.
15:06 And because I'm an entrepreneur,
15:10 I'm always five years ahead
15:12 and that doesn't really work with a lot of,
15:17 I'd say accounting corporate type of people.
15:22 So I went, okay, well, I need to get myself
15:25 into something I can control.
15:26 I have to be a believer in what I'm doing.
15:29 I have to see what the future is
15:31 and I have to develop something to live into the future.
15:34 So I was a kid playing Monopoly
15:37 and I played for like 10 years.
15:39 I knew every ratio, every rent, every house, every property.
15:43 I mean, it was just who I was.
15:45 So it became easier for me to think
15:47 about going into real estate and it was fun and it is fun.
15:51 And it's a blue chip part of diversification.
15:59 And the good or bad thing about it
16:02 is I have such great people running it
16:05 who know way more than I do.
16:06 And there's a thousand million nuances
16:09 to run a great business.
16:11 And I know them all about technical apparel
16:13 and I don't know them all about real estate.
16:15 So I'm proud to say that I'm very,
16:18 I have people that are running that perfectly
16:21 and I love them for it.
16:23 So then what's up with me then?
16:25 I mean, am I ready to retire?
16:27 No, I mean, 'cause all I do all day long
16:30 is I look at athletics, I look at bodies,
16:33 I look at technical apparel,
16:34 I look at how shoes and apparel
16:37 can enhance an athlete's life.
16:40 And now of course, with all these fabrics
16:43 and everything that's happening,
16:44 it's coming into people's day to day,
16:46 just walking to work and being in the office
16:48 and the antimicrobial, the sweat, the stretch,
16:52 the anti-ultraviolet, all these things
16:55 that kind of come into it are now pervading
16:57 the natural life and I love it.
17:00 I feel like I'm right in the middle of the biggest change
17:04 in the way people have dressed in the history of the world.
17:07 And I gotta go, so what am I gonna do?
17:11 So when I got the opportunity to invest
17:14 alongside a couple of incredible partners,
17:17 Anta out of China and FountainVesta,
17:20 private equity firm in Tencent,
17:22 and we bought, I think, the top five global
17:26 outdoor brands in the world,
17:27 Atomic, Salomon out of France,
17:30 and Peak Performance out of Sweden,
17:33 and you already mentioned Arc'teryx out of Vancouver
17:36 and my favorite, Wilson.
17:39 Wilson, I'm here for New York for the Open Tennis
17:42 and couldn't be more proud of the company
17:44 and everything that's accomplished.
17:46 It's just so much fun to me and it's just where my brain is
17:49 probably 90% of the time.
17:51 - And so when you're advising,
17:53 I understand that you're advising these companies
17:56 and helping push them in the right direction.
17:59 Are you following the Lululemon playbook
18:00 or how are you catering to these five different
18:04 outdoor brands?
18:05 - The Lululemon playbook, I believe it hasn't changed
18:09 at all because we set it up, I think,
18:12 perfectly from that book, The E-Myth,
18:14 about the entrepreneurial myth about how to set up
18:16 the structure, the processes, and document everything.
18:19 So when I left Lululemon, it was set up just to replicate
18:24 and that's what it's done.
18:27 So I think the thing for me is,
18:31 if I look back at the history,
18:33 I was in surfing, skateboarding, snowboarding,
18:37 and now Lululemon was the yoga.
18:40 And now the future of really what I see apparel is outdoor.
18:45 And this was put on steroids through COVID.
18:47 So it really helped us out a lot.
18:49 People got out and that was the way people could do it.
18:51 So it allowed me to now think about how I can take
18:55 these outdoor companies that were very male,
18:58 very engineering, very wholesale,
19:03 not really lovers of people, I would say,
19:05 because the wholesale business is about letting
19:08 someone else handle people, where I love people
19:11 and I love retail and I love direct to consumer.
19:14 And I also see the power of women.
19:16 I mean, it's just no secret that women are 50/50 in sports,
19:20 but they buy 70% of apparel.
19:23 So I know that, so how can I take these brands
19:26 and move them out of this men-centric kind of way
19:30 of thinking and show them the possibility of that?
19:33 I think the other thing is these brands are very winter,
19:37 except for Wilson, but all the other four brands are.
19:40 And we want to open up retail stores,
19:42 but they don't know anything about spring and summer clothing.
19:46 So then a lot of them are driven
19:48 'cause they're mountain people to go into trail running
19:51 in the summer.
19:52 So how do we build an apparel line and running shoes
19:56 for our, trail running shoes for our tarps?
19:58 And Salomon's already the best in the world at that.
20:02 And so a store can actually be a 360 store all year round.
20:07 Because when I was in the snowboard business,
20:10 what I learned is that that's complimentary
20:13 to the skateboard surfing part.
20:15 So you can actually make e-commerce, logistics,
20:19 warehousing, retail stores, hiring people, training them,
20:23 giving them a full year job.
20:25 But if you have a business that's going up and down
20:26 like that, it's impossible.
20:28 So I'm taking all those things that I've learned
20:30 from my company, West Beach, and then Lululemon,
20:33 and then applying them to this, correct.
20:35 (laughing)
20:36 - So yes.
20:37 (laughing)
20:38 And I'm interested, you said you see the future trend
20:43 trending towards outdoor.
20:45 You know, you accurately predicted the yoga trend.
20:49 So I think people put a lot of stock in your predictions.
20:53 Can you kind of expand on what you mean by,
20:55 like what you envision as this like trending
20:58 towards outdoor?
21:00 - Well, if I look at what happened in surf,
21:05 skate, and snowboarding, what happened in those sports
21:09 is that real athletes did them,
21:13 but then there was a natural way of those,
21:17 all that clothing pervaded itself
21:19 into the natural social structure outside of the sport.
21:22 So people in California would go surfing,
21:25 and then they would have their tech business.
21:27 And why should I move into a suit and tie?
21:30 I'll wear my hoodie and sweats
21:32 because I'm cold from the ocean,
21:34 or I'm going right in the ocean.
21:35 I can't have it.
21:36 You can't spend the time putting on suit and ties.
21:39 There's just no time in athletics for that.
21:41 So it was the same for skateboarding and snowboarding.
21:46 So, but what I failed at was beach volleyball.
21:50 No one wanted to look like a beach volleyball player
21:52 going to work and back.
21:53 - Shocking.
21:54 - Nobody wanted to look like a mountain biker.
21:59 Quite frankly, I tried that and failed at that.
22:02 It's kind of comes back to failing, you know, often.
22:05 So when I started to look at yoga, I mean, I went, okay,
22:09 this is the same playbook I've seen
22:11 in surf, skate, snowboarding.
22:12 So that's there.
22:14 And it ended up being a lot bigger than I thought it was.
22:18 But I just figured out woman as a,
22:21 I think from a athletic apparel point of view
22:24 before anybody else.
22:25 So that I think that was my niche there.
22:28 Now with outdoor, what's interesting to me is that
22:32 people not only want to be outdoors
22:37 and they want to be in the sports.
22:38 I think there's, because underlying all brands
22:42 that I'm involved with is not just the sport.
22:45 It's like, it adds to longevity.
22:48 I think it adds to, you know, healthy relationships,
22:52 a healthy mind, reproduction.
22:55 'Cause I personally come from,
22:56 I think everyone wants a white picket fence
22:59 and a nice marriage and a couple of kids.
23:01 I think that's the end of it.
23:02 And they want to live to like 89 to 120 years old,
23:06 which is very capable, we're capable of now.
23:09 So I think all my brands are driven that way.
23:11 And I could see outdoors, you know, the air, the trees,
23:16 the community that people live in.
23:19 'Cause we all, I mean, every statistic from longevity
23:23 would say that having friends and community
23:26 is actually almost more important than diet,
23:30 even more important than if you drink alcohol or cigarettes.
23:35 You know, having friends that will actually loan you money
23:38 if you're in trouble could be the number one statistic
23:41 of how long you're gonna live.
23:43 - Well, I have to say it is smart attaching your branding
23:47 to longevity and happiness and joy.
23:50 I mean, those are things that everybody wants.
23:53 - What a great way to live too.
23:54 - Yeah, certainly.
23:56 I wanted to ask about Lululemon.
24:00 I mean, it's come a long way from, you know,
24:05 when you started it in the 1990s, it's now an empire.
24:09 And it just keeps growing and growing.
24:11 And, you know, you know the business better
24:14 than anyone else, as you said.
24:15 And you haven't been afraid to be both a critic
24:19 and a huge cheerleader for Lululemon over the years.
24:23 I'm interested, you know, it came out really well
24:25 from the pandemic and is now bucking the retail trend
24:28 that's taking many down.
24:31 What do you think are Lululemon's biggest opportunities
24:36 and challenges in the current day?
24:40 - Well, you can tell by the way it bought Mirror
24:45 for like 500 million.
24:47 And then probably by the time they got out of it,
24:50 it probably cost them 800 million.
24:52 And so it tells me that they don't really understand
24:55 the business.
24:56 I have stayed away from technical.
25:01 You can see it's really failed for Nike
25:03 and Under Armour for sure.
25:05 I mean, it runs it counter to the core way
25:10 that the business is set up to sell in the store
25:14 and sell online.
25:15 They would have been much better off buying a company
25:18 I would say called FIGS,
25:20 which is a technical hospital scrubs that was fashionable
25:25 and then made technical.
25:26 I think that would have been a great purchase.
25:29 So now they're $800 million down.
25:33 So that's the kind of thinking
25:37 that I think you've got probably a board now that's old,
25:40 doesn't really understand it.
25:42 When they bought Mirror,
25:44 it took them about a year to fire the founder of that
25:48 who's kind of coming in.
25:50 So it tells me that the board,
25:52 the biggest risk is the board doesn't have the ability
25:54 to work with people that probably you're thinking
25:57 five to 10 years out in the future.
25:59 That's one thing.
26:01 The second thing is that,
26:03 do they really understand the product?
26:05 They have a couple of people there.
26:07 I mean, I'd call Glenn Murphy probably
26:10 who was the CEO of The Gap,
26:12 who's brought every bad thought
26:15 about how The Gap runs to Lululemon.
26:18 So you have, and then you have people from Shoppers in Canada
26:21 which is a kind of a CVS drugstore type of thing.
26:25 And you're kind of bringing that mentality to something
26:28 where Lululemon was built up to be an anti-gap type of thing.
26:32 So it was technical and it was changing its styling
26:37 every year, moving forward and thinking
26:40 about functional fabrics and how that enhances
26:43 the people's lives, not from a,
26:45 let's do an advertising campaign
26:47 and make people think they're happy,
26:49 but let's actually make a product that makes people
26:51 like phenomenal in every part of their life.
26:55 And so I think that that's the biggest risk
26:58 that Lululemon has.
27:00 They don't know how to work with futurists.
27:03 - Do you think they've veered too much into fashion then
27:06 as opposed to putting in a sport?
27:09 - Correct, correct.
27:10 So if you look at about 30% of their men's stuff,
27:12 it's to me, it's like, it's appalling.
27:15 You know, it's just like,
27:16 they're making like even dress shirts
27:20 that have no style to them,
27:23 but they're just making a dress shirt to put it in there.
27:25 I'm sure they get the fabric for $2 a meter,
27:28 they make it and so they,
27:30 and it's in the Lululemon store.
27:32 So people are buying, you know,
27:33 because they think it's technical,
27:34 they're buying it and wearing it,
27:36 but it's not, but what's happening is
27:40 they have the margin on it is so huge
27:42 that the merchandisers and everyone's getting bonused
27:46 on the profit and the margins of bad,
27:51 I'd call it streetwear fashion product,
27:55 which is only selling at a high price
27:57 because of the Lululemon technical product,
28:00 that it ends up being what I call bad profits.
28:04 Bad profits in a company like that lead to the gap
28:07 and eventually you can see it,
28:10 Lululemon's making more and more streetwear
28:13 and less and less technical wear.
28:15 - It ends up chipping away at the brand.
28:16 - Right.
28:17 - And then biggest opportunities, I guess, is the next.
28:20 - Well, for Lululemon to have a big opportunity,
28:24 they would have to risk.
28:26 And I think that they would have to become a brand
28:31 to people that people want.
28:34 I think through this whole diversity and inclusion thing
28:38 that they have become,
28:40 trying to become like the gap, everything to everybody.
28:43 And I think just the definition of a brand
28:45 is that you're not everything to everybody.
28:48 And I'll give you an example.
28:50 When I opened my first surfskate store,
28:54 and this is in 1980,
28:57 I wouldn't allow people in my store who smoked.
29:00 I actually didn't want customers to smoke.
29:03 I didn't want customers who bought my product
29:06 who smoked to be,
29:07 I didn't want that connection to happen at all.
29:09 So I was very, so, and these people would leave saying,
29:13 I'm gonna tell everyone not to buy in your store.
29:17 I'm gonna like, I'm gonna go to the city council.
29:21 I'm gonna go to the government.
29:22 I mean, we're gonna shut you down.
29:24 And these are lawyers and people like that.
29:27 And I thought it was so funny
29:29 because what happened is that
29:31 the people that were anti-smokers and very healthy,
29:34 then they came into my West Beach store in droves.
29:38 So I learned something from that.
29:40 And when I started Lululemon,
29:41 my very first manifesto line on,
29:45 which is what used to be on the bag,
29:47 and this is 1990, so you gotta take it in context,
29:50 but it was Coke and Pepsi are the tobacco of the future,
29:54 great marketing, terrible product.
29:56 So what did I learn from West Beach?
29:58 I learned that who I don't want,
30:00 I don't want people that are drinking Coke and Pepsi,
30:04 'cause I could see the,
30:06 those obesity epidemic happening in the US, even in 1995.
30:11 And you could see people drinking sugar
30:14 and this thing about Coke and Pepsi,
30:16 like we're the healthy drink type of thing.
30:20 It was just like the tobacco companies,
30:22 back in Mad Men, the series that came out,
30:24 and it appalled me, appalled me.
30:27 So I didn't want people who were
30:32 wearing the Lululemon brand,
30:33 who were drinking Coke and Pepsi or eating McDonald's,
30:37 'cause the fast food industry
30:39 was all part of that at the time.
30:41 So what I'm really getting at there is that
30:43 Lululemon has the opportunity to become a brand,
30:47 but in order to become a brand,
30:49 you've gotta be clear that you don't want
30:51 certain customers coming in.
30:53 And right now, I think through the,
30:55 they're fearful, they run out,
30:58 instead of the living out of possibility,
31:00 they live out of the fear of media backlash,
31:04 of not including everybody.
31:07 And it's just something I don't agree with.
31:09 - And so what do you think would be the consequence of that?
31:14 - Well, of that, I think that they would become a brand
31:18 that nobody else could compete against,
31:21 because I think there's so many,
31:22 I see brands coming out to compete against Lululemon
31:25 that have healthy people in their ads.
31:29 They don't, I mean, so as opposed to having people
31:32 that look very unhealthy to me on e-commerce,
31:36 like the men look sickly, the men,
31:38 the women are looking like, I don't know what they're,
31:42 but they're not inspirational
31:44 in any kind of case like that.
31:46 So I think that they have the opportunity
31:48 to move into the health, fitness, longevity,
31:53 fun space where Lululemon was meant to be.
31:56 - Well, thank you very much for joining us.
31:58 It was great talking to you, Jim.
31:59 - Okay, great.
32:00 Thank you very much.
32:01 Thank you very much.
32:02 (silence)
32:04 (silence)
32:06 (silence)
32:08 [BLANK_AUDIO]