Lululemon CEO Says It's Time to Stop Playing Defensively

In an earnings call Thursday, Laurent Potdevin said 2015 will be the year the Canadian yoga company "makes the shift from playing defense to playing offense."
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Chantal Fernandez
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In an earnings call Thursday, Laurent Potdevin said 2015 will be the year the Canadian yoga company "makes the shift from playing defense to playing offense."
Lululemon's first European store in London. Photo: Stuart C. Wilson/Getty Images for Lululemon Athletica

Lululemon's first European store in London. Photo: Stuart C. Wilson/Getty Images for Lululemon Athletica

When Laurent Potdevin became CEO of Lululemon at the beginning of 2014, he had quite a few problems to fix — most related to the company's public relations blunders in 2013.

Fifteen months later, and now Potdevin says it's time the activewear retailer "makes the shift from playing defense to playing offense." The company's fiscal 2014 sales figures suggest that it's ready: In the 12 months ending Feb. 1, net sales increased 13 percent to $1.8 billion, while gross profit increased 9 percent to $914 million, though operating margins and comparable store sales were down slightly.

What's driving the growth? The 48 stores Lululemon opened, largely in the U.S., had a lot to do with it; so did the company's apparel for men (up 16 percent year-over-year) and girls (up 51 percent). Lululemon is now operating 302 stores worldwide; 202 are located in North America. Potdevin says the long-term goal is to have 350 stores in the region, which will vary by size depending on the location and market. Resorts, for example, would benefit from smaller retail locations. There are also plans for two new stores in London, one in Singapore and one in Dubai.

New CFO Stuart C. Haselden, who came from J.Crew in January, also said the company needs to give more floor space to men's items. He used the Robson Street store in Vancouver as an example: a 50 percent increase in store space resulted in a more than 90 percent increase for the men's business. A similar result was achieved at the Santa Monica store.

Both Haselden and Potdevin were unequivocally positive about the future of the company. Haselden thanked founder Chip Wilson, who left the board in February, for his vision, and Potdevin said, "We compete against nobody else, we own the market we created."