Jun 18, 2018 · 52m · how-i-built-this
Lululemon Athletica: Chip Wilson
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of NPR's 'How I Built This,' host Guy Raz interviews Lululemon founder Chip Wilson about pioneering the modern athleisure movement through textile innovation, direct vertical retail, and the corporate controversies that defined his career.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 34.2% of the talking time here. How this is scored →
Guy as informed peer 3.1 Guest teaching 3.3 Guest disagreement 0.5 Guy pushing back 1.1
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 43:13 Wilson disputes Raz's characterization of his remarks
Wilson pushes back firmly against Guy's summary of his controversial comments about women's bodies, insisting there is a significant difference between what he said and what the public heard.
Hardest push from Guy ▶ 44:01 Raz presses Wilson on the impact of his remarksGuy acknowledges Wilson's feeling of being misunderstood but presses him firmly on whether he had time to reflect on how damaging and offensive the statement was to his audience.
Biggest teaching moment ▶ 24:47 Wilson explains Japanese branding perceptionWilson educates Guy on how Japanese apparel conglomerates could not invent brand names containing the letter L, making Western brands with Ls feel authentically North American to Japanese youth.
Guy holds their own ▶ 41:38 Raz corrects Wilson on the interview networkGuy corrects Wilson when he misremembers appearing on NBC, reminding him that the infamous interview actually aired on Bloomberg.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Live Show Announcement in Boulder Colorado | 1 | 0 | 0 | 0 | Guy Raz delivers an introductory monologue setting up Chip Wilson's entrepreneurial background, the birth of athleisure, and previews Wilson's past public controversies. | |
| Early Influences: Learning Sewing and Pattern Efficiency | 2 | 3 | 0 | 0 | Chip Wilson explains how watching his mother arrange patterns taught him manufacturing efficiency, followed by his lucrative stint working on the Alaska pipeline. | |
| Designing "Barbecue Shorts" and Early Vertical Retail | 3 | 3 | 0 | 1 | Chip describes inventing long, baggy barbecue shorts and pioneering direct retailing via a makeshift stand after department stores rejected them; Guy jokes about Calgary's short barbecue season. | |
| Launching the West Beach Surf and Skate Brand | 4 | 4 | 0 | 2 | Guy asks Wilson to unpack the counterintuitive economics of West Beach, where wholesale was losing money while retail stores were highly profitable due to supply chain markups. | |
| Selling West Beach to Morrow Snowboards | 3 | 4 | 0 | 0 | Wilson discusses the distress sale of West Beach and his subsequent discovery of yoga, spotting an impending cultural trend using his 'three times' rule. | |
| Mid-Show Break and Lululemon Preview | 2 | 4 | 0 | 0 | Wilson explains targeting the emerging demographic of professional women and investing in specialized Japanese flat-seam machines to eliminate athletic chafing. | |
| Opening the First Hybrid Studio Store | 3 | 5 | 1 | 2 | Chip explains the hybrid yoga studio and retail shop model and educates Guy on the linguistic reasoning behind the name Lululemon regarding Japanese market perceptions. | |
| Hiring Shannon Gray and Overcoming Cash Flow Strain | 3 | 3 | 0 | 1 | Guy asks how Wilson bridged his background as an athletic male into female apparel; Wilson details hiring designer Shannon Gray and briefly returning to run West Beach to stay solvent. | |
| Fourth Avenue Street Store and Breakthrough Products | 3 | 3 | 0 | 0 | Wilson describes moving into the Fourth Avenue street location, surviving near-bankruptcy, and making the intentional design choice for discreet waistband branding. | |
| Grassroots Expansion and the Viral Naked Stunt | 3 | 2 | 0 | 1 | Guy questions Wilson on his viral publicity stunt where customers showed up naked in trench coats to receive free apparel in Vancouver. | |
| Scaling Domestically, Internationally, and Private Equity | 4 | 4 | 1 | 2 | Guy asks why Wilson sold half the company and stepped down if revenue was exploding; Wilson admits he was plagued by fear of losing everything. | |
| Board Friction and Taking Lululemon Public | 4 | 4 | 1 | 1 | Wilson reflects on his misalignment with private equity, conceding that he mistakenly sold 48% and lost board control because he did not understand public corporate governance. | |
| Billionaire Milestone and Wealth Grounding | 6 | 5 | 4 | 6 | Guy directly confronts Wilson about the 2013 sheer pants controversy, correcting him on the network and holding him accountable to how the public received his comments. | |
| Life After Lululemon, Family, and Luck vs. Passion | 3 | 3 | 0 | 0 | Wilson reflects on coaching his twin boys, stepping back from startup life, and articulates how his deep passion aligned with market timing. | |
| How You Built That: The Eye Patch Case | 2 | 3 | 0 | 0 | In the 'How You Built That' segment, Mike Sorrentino shares how he invented and patented the Eye Patch Case for iPhone after covering news stories as a producer. |
Statements from this episode (27)
Chip Wilson: Saving inches on layered fabric yields thousands of dollars
“Once I got into big production and you'd lay 50 to a hundred layers of fabric down, When you can save even five, six, seven inches of fabric it can mean thousands of dollars.”
Wilson earned $175,000 working on the Alaska oil pipeline at age 19
“In today's dollars, probably about 600,000. And back then it was about 175,000 American.”
Wilson made $1,000 daily selling shorts compared to $120 oil company salary
“And in a day we'd make like a thousand dollars a day selling the shorts, and I was making like a 120 dollars at the oil company, so it wasn't tough to figure out the math of that.”
Wilson: West Beach lost $1M on wholesale while retail made $1M
“My wholesale business was losing a million dollars a year, and then I had these two retail stores that were making a million dollars a year.”
Wilson: Direct-to-consumer retail captures $60 profit on $20 items versus wholesale
“If I made something for 20 dollars, then I would have to sell it to Dick's Sporting Goods for 40, and then they would sell it for 80. Where in my own retail stores, then I was putting it in there for 20, and making 80 dollars, so there was a 60 dollar profit i…”
Wilson: Japan made up roughly 30% of global snowboarding sales
“Japan had just exploded, so it was about 30% of all snowboarders business.”
Wilson sold West Beach based on brand value days before missing payroll
“We quite honestly could not make payroll on Friday, and we sold Wednesday based on brand value only.”
Wilson: Walked away with $800,000 after taxes from West Beach sale
“So I walked away with a million, and after tax, 800,000, and then you've got a, you know, I had paid myself probably 30 to 40,000 dollars for 18 years.”
Wilson operates on a heuristic: observing a trend three times triggers action
“I have always believed in this three times thing, so when I see something three times, and I move really quickly.”
Wilson: In the 1990s, gym culture ignored athletic apparel aesthetics
“At the time, the fashion of gyms was to wear your very worst clothing, and mostly because probably 90% of people in gyms were men, and, ah, and you know, you knew you were gonna sweat in it, you were gonna get ugly in it, and you just wanted to throw it in the…”
Wilson: The 1998 rise in female university graduates birthed the athleisure market
“I had to read an article in the paper one day that told me that 60% of the graduates at a university were women in 1998.
And I went, wow, you know,
Something really, really big is going to come out of this, and that is we're going to end up with a market tha…”
Wilson: Nike did not understand clothing design because their shorts caused chafing
“While Nike was a shoe company, so I know they didn't really understand clothing either, because even in their running shorts, they had these open seams in between their legs, and I'd run five K
and I'd totally rash.”
Wilson: Spent $160,000 buying four Japanese flat-seam sewing machines
“I went to Japan. I'd heard about these machines that were 40,000 dollars a piece, which was Huge at the time, and I bought four of them.”
Wilson: Lululemon Created First Cotton-Feeling Synthetic Athletic Fabric
“When I started to do my first design meetings with these 10 groups of 10 women, and we had like five or six samples, and they touched the fabric, and they put it on, it was the first time that really a synthetic fabric felt like cotton.”
Wilson: First Lululemon Store Doubled as a Morning and Evening Yoga Studio
“The only way I can, I figure out how to do it is to combine my business with Fiona Stang, my yoga teachers, and I had all my clothing on rolling racks, and we'd move it all out to the side and have yoga classes there early in the morning and then at night.”
Wilson: Lululemon name chosen because Japanese consumers perceived 'L' as North American
“And it started to occur to me that the five big trading companies in Japan were making North American brand name clothing. In other words, they would come up with their own brand name in order to deliver that to the Japanese customer. But Japanese, those big t…”
Wilson: The Lululemon logo originated as a stylized 'A' for Athletically Hip
“But the logo actually came from Athletically Hip. So it was a stylized A from the athletic.”
Wilson: Lululemon could not finish first retail store without $50K severance
“And if it wasn't for that 50,000 dollars, we never would have been able to finish our store.”
Wilson: Placed Lululemon logo on waistband to avoid corporate chest branding
“I put it there because I was very clear that I didn't want big logoing, and I thought that somebody should look in the mirror and not see any logos. And I definitely didn't like logos on the left breast because I looked at it as being Kind of corporate logoing…”
Lululemon tested new markets using cheap alley pop-ups before investing in stores
“So we would go into every city in the future, set up a store in a back alley or in a side street and develop our market, invite yoga instructors in before we spent, you know, 600 to a million dollars on a store.”
Wilson: Lululemon captured triple normal retail profits through vertical integration
“I mean, you have to understand that, again, that nobody in the world had, was owning manufacturing right to the retail store. I mean, I was taking triple the profit of most people.”
Chip Wilson: Lululemon went public too quickly under private equity pressure
“The private equity, they're there to make money for their investors, and I had a very long-term vision for Lou Lemon, and they had quite a short-term vision for Lou Lemon. So we went, ah, we ended up going public way too quickly.”
Wilson accidentally sold 48% of Lululemon to private equity, losing board control
“I really only wanted to sell 30% of the stock to the private equity guys, but I ended up selling 48, so I lost control of the board seats, and I didn't know how to negotiate for them.”
Chip Wilson: Advisor push to sell shares diluted founder board power
“The advice I got was, hey, Chip, you should sell more of your shares into the marketplace, because the more shares that are out there, the more the institutional investors will be able to get a good chunk of it and be able to hold it for a long time. But the r…”
Wilson claims 2013 sheer pants pilled because women bought sizes too small
“Suddenly, women were coming into the store and not wanting Lululemon for athletics. They were coming in looking For it to shape their bodies. But the sewing technique and the fabric wasn't meant for it. So, what they were doing is buying two to four sizes smal…”
Lululemon's board ousted Wilson as chairman, deeming him a public liability
“The board took me off as chairman because they felt like I wasn't the right front man for the company anymore, and I was a liability to Lou Lemon.”
Wilson: 2013 Bloomberg remarks were antithesis of what he built at Lululemon
“Well, it was a poor choice of words. It was absolutely devastating to me. It was devastating to my family. I mean, people would come up to my wife and go, how can you be with a man like that that would say that type of thing? But more so it was the antithesis …”