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I hope everyone had a great Fourth of July Weekend!

This week we’ll unpack how Lululemon transcended being a mere apparel brand to become a cultural phenomenon through immersive in-store experiences, a fiercely loyal community, and vertical integration across product, tech, and fitness. And we’ll dig into their newest story: the lawsuit against Costco over alleged “dupes.”

As always, we’re eager for your thoughts reply with feedback on this format or ideas for future issues. Let’s dive in!

How Lululemon Got Its Cult Status

Lululemon was founded in 1998 in Vancouver by Chip Wilson, who aimed to fill a gap in women’s athletic wear by combining high-performance fabrics with sleek, yoga-friendly styles. Their first store doubled as a yoga studio and community hub, shipping a powerful message: this was more than clothes, it was a lifestyle. Early products like the technical yoga pants fostered both word-of-mouth and a sense of exclusivity, amplified by a grassroots ambassador network teaching classes in local stores. As word spread, Lululemon evolved from quiet community hubs into flagship “brand temples” featuring in‑store events, support bars, and tailored design experiences—all reinforcing the shared ethos of wellness and self-improvement. They pioneered vertical integration: developing fabrics, controlling production, and even acquiring Mirror (a smart-mirror fitness platform) to unify product, community, and tech under their umbrella. By embedding the brand in customers’ daily routines, workouts, social gatherings and digital classes, Lululemon created a sticky cultural identity few apparel brands can match.

The brand’s early success wasn’t just about quality though, it was also about identity. Lululemon offered aspirational athleticism, but with a mindful, boutique feel that made wearers feel like they belonged to something bigger. Stores weren’t just places to buy things; they were spaces to stretch, sweat, and connect. Employees were trained as educators, not salespeople, tasked with introducing customers to product benefits and community events. That personal connection helped fuel their legendary customer loyalty and justify premium pricing. They didn’t just sell leggings, they sold confidence, alignment, and a vision of self-optimization. As the athleisure wave took off, Lululemon wasn’t swept along with the other brands, they were the ones leading the charge. The result was a rare brand that became both a fashion statement and a functional staple.

What’s New: Lululemon vs. Costco Lawsuit

This week, Lululemon filed a lawsuit in California against Costco, accusing the retailer and third-party brands like Kirkland, Danskin, Jockey, and Spyder of selling “confusingly similar” versions of their Scuba hoodies, Define jackets, and ABC pants. The suit alleges these knockoffs mislead consumers and infringe on Lululemon’s “trade dress,” with prices as low as $8 for hoodies and $10 for pants versus their premium $118–$128 originals. Lululemon claims it sent cease-and-desist notices in November 2024, but with no effect, and is now seeking an injunction and monetary compensation. Meanwhile, public sentiment is mixed. Some see this as defense of brand equity, others as free marketing for Costco’s dupes. The case spotlights a broader tension in today’s “dupe culture” where viral, affordable knockoffs proliferate but threaten the perceived value of premium brands. Legal experts say the challenge for Lululemon will be proving customer confusion and establishing trade dress protection in such a trend-heavy category. If successful, the case could set a precedent for premium DTC brands defending their IP against mass retailers. And if it fails, it could invite more copycat threats for high-end apparel companies across the board.

This isn’t just a legal battle, it’s a brand identity showdown. The rise of TikTok “dupe hauls” and viral budget fashion finds has blurred the line between inspiration and imitation. For Lululemon, which relies heavily on its brand perception to support premium pricing. Allowing cheaper lookalikes to circulate unchallenged could quietly erode long-term value. On the flip side, lawsuits can backfire if consumers see them as anti-competitive or out-of-touch with modern buying behavior. That’s why this case matters far beyond apparel. It’s a test of how modern brand loyalty holds up in a viral, price-sensitive world. Costco has millions of devoted shoppers, and their Kirkland line is known for offering near-premium alternatives. If they win the PR war, Lululemon could risk looking like the brand that “couldn’t take the competition.” But if Lululemon prevails, it might draw a bold line in the sand about what premium really means.

Behind the Scenes: Why This Lawsuit Matters

This isn’t Lululemon’s first legal battle, they previously sued Peloton in 2021 over similar design imitations, later turning it into a co-branded partnership. What sets this one apart is the scale of Costco’s influence and the optics: media is highlighting the price differential and fueling viral comparisons online. For Lululemon, built on premium engineering, craftsmanship, and community equity, legal action is a strategic choice to defend hard-earned brand loyalty. But with shares down ~36% YTD amid tariff challenges and a 1% YOY sales increase, the lawsuit also raises questions of optics vs. substance. At a time when brand engagement is as much social as commercial, Lululemon is signaling that their cultural cachet isn’t up for negotiation even if it comes at the cost of being portrayed as litigious.

What’s really at stake here is narrative control. In a brand-led company like Lululemon, perception is part of the product. If the perception shifts and it starts to feel like “just another leggings brand”, the value proposition begins to crumble. That’s why the company invests so heavily in storytelling, from ambassador programs to mindful campaigns and community-building efforts. Legal action may not feel “on brand” for a company rooted in yoga, but the logic is consistent: defend the experience, not just the merchandise. And that experience includes feeling elite, original, and inspired. In a world where commoditized clones dominate shelves and feeds, standing firm is part of the positioning strategy. Lululemon isn’t just fighting for its designs, they’re fighting for what it means to wear them.

Core Lesson: Culture Over Commodity

Lululemon built its business not on features, but on culture. By creating immersive brand experiences from ambassador-run yoga classes in-store to community sweat events, exclusive product drops, and integrated tech like Mirror, they’ve forged emotional bonds that transcend price and direct competition. Vertical integration lets them control quality, storytelling, and customer experience from fabric lab to checkout line. When they defend trade dress, they’re defending attitude, not just silhouette. In today’s world, where imitation is easy and viral, culture is what sets you apart and makes legal battles worth winning.

Their strategy shows that premium brands can’t afford to be passive. They need to constantly reinforce their message through action, story, and consistency across every touchpoint. From fabric innovation to in-store events to online fitness platforms, Lululemon doesn’t just sell, you experience it. That immersion builds loyalty that resists commodification. When someone wears Lululemon, it signals a mindset just as much as a lifestyle. That’s not something easily copied, even if the fabric is. And that’s why Lululemon continues to invest so heavily in brand identity. Because when culture becomes the product, the business becomes Built to Last.

Key Takeaways for Builders

• Know what your brand stands for. If your cultural identity is core to value, protect it.

• Design immersive experiences. From product to community to tech, brand engagement is a multi-sensory journey.

• Own your ecosystem. Vertical integration isn’t just a buzzword, it helps maintain quality and consistent brand messaging.

• Value equity over transactions. Choosing to defend vs. monetize can strengthen long-term belief not just short-term revenue.

• Watch the dupe edge carefully. Social imitation may boost awareness but also risks cheapening your brand over time.

Let me know what resonates, or if you’ve seen this play out in other industries. Reply with your stories. We might feature them next week!

Built to Last Community

Built to Last is for founders and operators who aim to build more than just a product. We’re read by founders who want a cultural presence, legacy, and enduring company. If you know anyone who feels this way, please consider forwarding this to them, it would mean the world to us as we grow this community.

Thanks for being part of the journey,
— The Built to Last Team