A key focus of the WCM Quality Global Growth portfolio is to find quality global companies with durable, strengthening economic moats and corporate cultures aligned to this growth.

In this brief update, Brian Huerta, Client Portfolio Manager, WCM Investment Management discusses lululemon, a company WCM holds that has an expanding economic moat and aligned corporate culture.

Stock in Focus: lululemon

Alistair Dunne (AD): Hello and welcome to today’s Stock in Focus. Joining me from WCM Investment Management is Brian Huerta and my name is Alistair Dunne. Hi Brian.

Brian Huerta (BH): Hi Alistair.

AD: Today the stock we’ll be looking at is lululemon. Brian are you able to give us an understanding of the business?

BH: lululemon is a maker of high-end, premium-priced athletic apparel. The brand is really well known by some of the yoga enthusiasts and the Pilates instructors but is also pervasive with teens, young and middle-aged adults, and even some of the weekend athletes. They really defined the athleisure category a little more than 10 years ago and it’s a brand that people know and aspire to.

AD: And how’s the company been able to grow its competitive advantage?

BH: It’s really about the people and the product at lululemon. The people, the sales associates are very well empowered, they’re very energetic, they really exude the culture. The product, people trust it, they know it. They know that it’s going to be fresh, new, it’s going to be of the highest quality, the threads and fabric, and it’s going to fit well.

AD: You mentioned culture there, are you able to give us a bit of an insight into the corporate culture and how it supports the competitive advantage?

BH: If you walk into a store, you really feel the culture. It emanates very quickly from the employees. They also really were an early adopter if you will, of grass roots marketing.

Years ago they started the ‘lululemon ambassador program’, it’s a program that provides financial assistance and other sources of help to yoga studios and fitness boutiques that make people become brand ambassadors for lululemon and it’s kind of a free promotion if you will, of the brand that pulls people together.

That’s a big part of the lululemon story, is people, community, and investing in the community. And they all do it in their organic, grassroots way.

AD: Beautiful, thanks so much for your time today Brian.

BH: Thanks, Alistair.