Kit & Ace, the new retail venture from the son of Lululemon Athletica Inc founder, has been resounding success

When John James “JJ” Wilson was growing up, family dinner-table conversation turned most nights to retail and fashion.

Indeed, the son of Lululemon Athletica Inc. founder Chip Wilson spent so much time as a teen after school and on weekends at the yoga retailer’s flagship Vancouver store that he began routinely calling his father by his first name, a convention that persists today.

“I would be in the stores yelling ‘Dad! Dad! Dad!’ and he wouldn’t turn around until I yelled ‘Chip,’ so I think I got into the habit then,” the now-26-year-old recalled in a recent interview to discuss his own entrepreneurial retail venture Kit & Ace, which has seven stores in Canada and the United States.

When it became clear that Lululemon was on a hot growth trajectory, JJ was invited to come along on the company’s initial public offering tour and sat in on Lululemon’s early board meetings.

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Steve Bosch/National PostNew store "Kit and Ace" in Gastown in Vancouver, B.C., on July 30, 2014. The retail "concept store" is owned by Chip Wilson's wife and son.

Since co-founding Kit & Ace nine months ago with his stepmother, Shannon Wilson, the “technical luxury” clothing brand has sold so well the pair is aiming to open 30 to 50 new locations in North America by the end of 2015.

JJ has inherited the family’s love of fashion — Ms. Wilson was Lululemon’s original lead designer and a key architect behind the butt-flattering pants that later made the yoga brand a household name — as well as his father’s boundless zeal for creative self-improvement, epitomized by the latter’s creation of Lululemon’s goal-oriented “manifesto” on its website and clothing bags.

Kit & Ace is the apotheosis of the family’s shared passions and talents: high-concept fabric, upscale clothing designs aimed at people with active lifestyles to wear when they are not working out, and building a brand through storytelling.

As she did at Lululemon with its proprietary stretch fabric Luon, Ms. Wilson spent two years developing Qemir, a stretchy cashmere blend that can be put in the washer and drier.

“I thought ‘What if I could take something as typically luxurious but as temperamental as cashmere and build into it the technical attributes that I am really looking for in my clothing?’ ” Ms. Wilson said in an interview from Kit & Ace’s headquarters in Vancouver, hometown to Lululemon. Kit & Ace are the imaginary brand personalities behind the retailer’s target customers: city dwellers in their 20s and 30s, physically fit, with a sense of style.

“As beautiful as a lot of luxury [clothing] is, it’s not necessarily functional. Things are either constructed in a way that they are difficult to move in or the fabrics are really difficult to handle: They need a lot of dry cleaning, or they are just very delicate.”

Chip Wilson offered Qemir three times to Lululemon’s board, but it was rejected before his wife and son decided to develop their own apparel line and retail stores around the high-concept fabric.

Around that time, Mr. Wilson had a public and nasty spat with the board, saying the company was not embracing product innovation. It was settled in August when he sold half his stake to private-equity firm Advent International, which added two members to Lululemon’s board with his approval. He officially resigned from the Vancouver-based sportswear retailer in early February.

Despite his father’s exit from Lululemon’s board, JJ said the entrepreneur has many projects on the go and his role in Kit & Ace will be informal. “What we have in Chip is a mentor and someone to bounce ideas back and forth off of,” he said. “He is 100% supportive of Kit & Ace.”

JJ also insists there is no rift between the family and the brand they created, nor do they have an interest in competing with Lululemon, whose annual sales increased more than 50% in the last two full fiscal years to US$1.6 billion, despite a mass recall of botched yoga pants and a subsequent market fallout.

“They are different brands. Everything that we are creating [with Kit & Ace] isn’t designed to sweat in, necessarily. We love Lululemon, and we both spent our lives working there and we still own a significant portion of the company, so it doesn’t make sense for us to compete with it.”

Kit & Ace’s designs also target a slightly more upscale or “aspirational” consumer, one who may not buy luxury products all the time, but will splurge on stylish cashmere. Designs include a $78 crew neck T-shirt to a bulky $198 wrap sweater, both made of the brand’s stretchy “technical” cashmere, which has been pre-washed and pre-shrunk.

That said, Lululemon may come to regret saying no to a potentially hot new growth stream.

Early buzz and demand for Kit & Ace, coupled with the Wilson family’s fashion pedigree, has afforded the brand a much faster growth trajectory than a typical retail startup. After opening its first shop in Vancouver in July, Kit & Ace has since opened six other locations in Edmonton, Calgary, Saskatoon, Toronto, New York and San Francisco.

“We are not a brand that is fighting for real estate,” JJ said. ‘The [landlords] are coming to us, so we have been getting really good real estate really early. It’s sort of messing up my intention to spend a little bit more time building the market. But the demand was there, and the industry response to the technical cashmere product has been incredible.”

The Wilson family has invested $7 million in Kit & Ace and plans to take on about $300 million in debt by 2019 and expand the company into London, Tokyo and Australia. They plan to add a line of washable silk goods to the brand’s spring collection.

Financial Post

hshaw@nationalpost.com

Twitter.com/HollieKShaw

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