How did Lululemon become a $10 billion yoga empire?

The popular apparel chain keeps posting profits, and competitors are wondering what goes into its "secret sauce"

Lululemon
(Image credit: CC BY: lululemon athletica)

Investors expected little from Lululemon when it began selling shares at $2 a pop in 2007. The maker of Wunder Under pants and other yoga women's wear hardly seemed like a player in the competitive world of retail sportswear. Five years later, Lululemon's stock has hit $76, and the company is valued at $10 billion — more than the clothing behemoth J.C. Penney. Last week, Lululemon posted a quarterly profit of $74 million, reported sales growth for the twelfth straight quarter, and, fittingly, opened a Boston store with a yoga class and dance party for 500 neon-clad guests. Here, a guide to Lululemon's "secret sauce":

How is Lululemon different from other retailers?

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