Lululemon 2011 Annual Report Download - page 10

Table of Contents
Our Culture and Values
Since our inception, we have developed a distinctive corporate culture with a mission to provide people with components to live a longer,
healthier and more fun life. We promote a set of core values in our business, which include developing the highest quality products, operating
with integrity, leading a healthy balanced life and instilling in our employees a sense of self responsibility and personal achievement. These core
values allow us to attract passionate and motivated employees who are driven to succeed and share our vision of “elevating the world from
mediocrity to greatness.”
Community-Based Marketing
We differentiate our business through an innovative, community-based approach to building brand awareness and customer loyalty. We
pursue a multi-faceted strategy which leverages our local ambassadors, social media, in-store community boards and a variety of grassroots
initiatives.
Product Design and Development
Our product design efforts are led by a team of designers based in Vancouver, British Columbia partnering with international designers.
Our team is comprised of dedicated athletes and users of our products who embody our design philosophy and dedication to premium quality.
Our design team identifies trends based on market intelligence and research, proactively seeks the input of our guests and our ambassadors and
broadly seeks inspiration consistent with our goals of style, function and technical superiority.
To ensure that we continue to provide our guests with functional fabrics, our design team works closely with our suppliers to incorporate
innovative fabrics that bring particular specifications to our products. We partner with a leading independent inspection, verification, testing and
certification company, which conducts a battery of tests before each season on our fabrics, testing for a variety of performance characteristics
including pilling, shrinkage, abrasion resistance and colorfastness. We collaborate with leading fabric suppliers to develop fabrics that we
ultimately trademark for brand recognition whenever possible.
Sourcing and Manufacturing
We do not own or operate any manufacturing facilities, nor do we contract directly with third-party vendors for fabrics and finished goods.
The fabric used in our products is sourced by our manufacturers from a limited number of pre-approved suppliers. We work with a group of
approximately 45 manufacturers, five of which produced approximately 67% of our products in fiscal 2011. During fiscal 2011, no single
manufacturer produced more than 36% of our product offering. During fiscal 2011, approximately 49% of our products were produced in China,
approximately 41% in South/South East Asia, approximately 3% in Canada and the remainder in the United States, Peru, Israel, Egypt and other
countries. Our North American manufacturers provide us with the speed to market necessary to respond quickly to changing trends and increased
demand. While we plan to support future growth through manufacturers outside of North America, our intent is also to maintain production in
Canada and the United States whenever practicable. We have developed long-
standing relationships with a number of our vendors and take great
care to ensure that they share our commitment to quality and ethics. We do not, however, have any long-term agreements requiring us to use any
manufacturer, and no manufacturer is required to produce our products in the long-term. We require that all of our manufacturers adhere to a
code of conduct regarding quality of manufacturing, working conditions and other social concerns. We currently also work with a leading
inspection and verification firm to closely monitor each supplier’s compliance with applicable law and our workplace code of conduct. We
believe that the services of additional, or other, producers of our fabrics could be obtained with little or no additional expense to us and/or delay
in the timeliness of our production process.
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