Lululemon 2010 Annual Report Download - page 11

Table of Contents
Store Economics
We believe that our innovative retail concept and customer experience contribute to the success of our stores.
During fiscal 2010 our corporate-owned stores open at least one year, which average approximately 2,874 square
feet, averaged sales of approximately $1,726 per square foot.
Management performs an ongoing evaluation of our portfolio of corporate-owned store locations. In fiscal 2010
we closed one corporate-owned ivivva athletica store in British Columbia and one corporate-owned lululemon
athletica store in Australia. As we continue our evaluation we may in future periods close additional corporate-
owned
store locations.
Store Expansion
From February 1, 2002 (when we had one store, in Vancouver) to January 30, 2011, we opened 121 net
corporate-owned stores in North America. We opened our first corporate-owned store in the United States in 2003.
Over the next few years, our new store growth will be primarily focused on corporate-owned stores in the
United States, an attractive market with a population of over nine times that of Canada. We opened net 12 stores in
the United States and Canada in fiscal 2010, including one franchised store that was reacquired.
Direct to Consumer
In fiscal 2009 we launched our e-commerce website which, along with phone sales, makes up our direct to
consumer channel. Direct to consumer is an increasingly substantial part of our business, representing approximately
8% of our net revenue in fiscal 2010, compared to 4% of our net revenue in fiscal 2009. We believe that a direct to
consumer channel is convenient for our core customer and enhances the image of our brand. Our direct to consumer
channel makes our product accessible in more markets than our corporate-owned store channel alone. We use this
channel to build brand awareness, especially in new markets, including those outside of North America.
International Stores
Beyond North America, we intend to expand our global presence as part of our long-term business strategy. We
believe that partnering with companies and individuals with significant experience and proven success in the target
country is to our advantage. As of January 30, 2011, we had 11 corporate-owned stores and four showrooms in
Australia and one showroom in Hong Kong.
Wholesale Channel
We also sell lululemon athletica products through premium yoga studios, health clubs and fitness centers. This
channel represented 2% of our net revenue in fiscal 2010 and 2% of our net revenue in fiscal 2009. We believe these
premium wholesale locations offer an alternative distribution channel that is convenient for our core consumer and
enhances the image of our brand. We do not intend wholesale to be a significant contributor to overall sales. Instead,
we use the channel to build brand awareness, especially in new markets.
Franchise Stores
As of January 30, 2011, we had four franchise stores in the United States. In fiscal 2010 we reacquired the
franchise rights of nine Australia locations, which we previously held an equity interest in, and one Saskatchewan,
Canada location, thereby decreasing the net revenue earned through our franchise channel. This channel represented
1% of our net revenue in fiscal 2010 and 3% of our net revenue in fiscal 2009. We began opening franchise stores in
select markets in 2002 to expand our store network while limiting required capital expenditures. Opening new
franchise stores is not part of our near-term store growth strategy. We continue to evaluate the ability to repurchase
attractive franchises, which, in some cases, we can contractually acquire at a specified percentage of trailing
12-month sales. Unless otherwise approved by us, our franchisees are required to sell only our branded products,
which are purchased from us at a discount to the suggested retail price.
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