Vancouver-based Lululemon said it has made a minority investment in 7mesh Industries, a startup based in nearby Squamish, British Columbia, that sells $250 cycling jackets and $140 shorts. Lululemon said 7mesh would collaborate on new ventures with Lululemon’s research and development arm called Whitespace.
“It is an interesting collaboration, a relatively small effort if you will, but what we like about it is it is an example of how we are looking to stretch our model of innovation outside our four walls,” said Lululemon CFO and COO Stuart Haselden in an interview with Fortune. “Cycling is a category that is small but if we could leverage a partnership with them, it could make sense for us to enter it effectively.”
Haselden said Lululemon is aiming to have an initial line of product from the collaboration with 7mesh in stores by the middle of 2018, aiming to take advantage of the key cycling season. When asked if a full takeover for 7mesh could occur down the road, the financial chief said simply “that door is always open.”
The collaboration points to the work that Lululemon’s executive team has done to try to sell shoppers and Wall Street experts on the idea that the apparel retailer does more than sell just yoga gear. When Lululemon went public in 2007, the sales pitch to investors was that it was a “yoga-inspired apparel” maker. But in recent years, it has sought to sell more clothes meant for running, swimming, and even outwear. A big international ad campaign Lululemon debuted this year with Vice Media points to that evolution.
“The continuous cadence of innovation we are envisioning will include categories we are currently in and new categories that make sense within a broader assortment within our formats,” said Haselden. New ventures like 7mesh are part of Lululemon’s 10-year plan to generate 50% of net new profitability from businesses and product categories where it doesn’t currently compete.
