What do you do after starting Lululemon? Chip Wilson dives into his new venture Kit and Ace
What do you do after becoming a billionaire selling $100 yoga pants to women? You sell a little less then 13.85% of the company for $845 million (leaving you with 13.85% worth almost $1.3 billion), walk away and start what you hope is the next big thing.
That is exactly what Chip Wilson, the 59 year old founder of Lululemon did the other week. Wilson sold half his stake and resigned his seat on the board to focus his attention on the venture started by his wife and son. Their new company Kit and Ace focuses on technical cashmere. With t-shirts starting at $84 there is no question that this is luxury company through and through. Wilson has invested $7 million in the new venture with plans to take on $300 million in debt that among other things will allow them to expand from the current 7 stores to 102 by 2018. They expect to be doing $1 billion in sales within the next five years.
Wilson founded Lululemon in 1998 after selling snowboarding apparel company, Westbeach. Popular in Japan, Westbeach had developed a fabric for long underwear that would form the basis for Luon, the source of those glute hugging yoga pants that women love and guys love to look at. Having concluded that the letter L in a name convinced Japanese customers that a product was authentically American, he decided that his next venture would have three L’s in it.
Wilson, who had stepped into the background of Lululemon returned to the public scene when the too-shear yoga pants debacle hit. His infamous video apologizing to the employees of Lululemon demonized him as an insensitive, uncaring jerk. True or false, Wilson’s clashes with the board of directors did lead to drastic changes at the top of Lululemon’s corporate structure and a massive jump to its share price. On more then one occasion he accused the company of not being progressive and had the offer of bringing the technical cashmere fabric to Lulu rebuffed.
Who will get the last laugh? Perhaps Wilson. He did manage to convince the world to buy overpriced yoga pants. You might not want to bet against him hitting gold twice. For those of you on the Shortees side of life, I wouldn’t bet on any products being designed to fit those of us in the 5’8″ and under club but we will have to see. If you have tried any of their clothes let us know.
For a fascinating look at Chip Wilson and his journey read Amy Wallace’s article in the New York Times Magazine here.