our factories

Global manufacturing is a subject that is not black and white, where there are many possibilities and potential outcomes. It is also a subject that draws much passion, energy and emotion from all sides of the discussion. At lululemon, we happen to be pretty passionate about it as well.

We started with one lululemon store in the Kitsilano neighbourhood of Vancouver BC, in 1998. Our first factory was just a 10 minute drive from the store. Then one store became seven, which eight years later became over seventy-eight stores in four countries and by the end of 2012 will be over 200. With this growth we've formed global manufacturing partnerships that support our needs for both capacity and technical capability

And we're still partnering with that first factory in Vancouver that's just a short drive away.

selecting our partners

STEP ONE: IDENTIFY POTENTIAL FACTORY PARTNERS
A small, tight-knit group of manufacturers were specifically chosen based on capability, capacity, quality and their social, ethical and environmental responsibility values and actions.

STEP TWO: AUDIT AND INSPECT FACTORIES
We conduct an initial audit to ensure that our manufacturing facilities meet the terms of our code of conduct. Those include national, international and lululemon specific requirements.. We work with leading third-party international auditing companies that helps us monitor and manage our supplier compliance, and provide neutral and unbiased evaluations.

STEP THREE: COMPLETE CORRECTIVE ACTION
During the audit, if a violation to our code of conduct is found or a recommendation is made by the auditors, a corrective action plan (CAP) is put in place. In partnership with the factory, we create a plan that outlines the root causes of the problem, the solution, and the timeframe given to implement the solution. Once the factory has the solution in place, lululemon's partner sustainability team visits the factory again to personally review the change. If it is still not up to our standards, the process begins again with discussion, review and a new timeline for improvement.

STEP FOUR: CREATE GOALS FOR PRODUCTION
All factory partners commit to lululemon's supplier agreement which outlines our manufacturing expectations and is a signed and written commitment to the standards outlined in our workplace code of conduct.

Determining which one of our approved factory partners will receive work orders for our apparel manufacturing is a decision that many believe is based solely on cost. We have developed a balanced scorecard which rates each partner based on social and environmental responsibility, delivery capability, price value and quality assurance. From our small group of partners, the factories that meet our high requirements in these four areas are the ones we work with each season.

STEP FIVE: ESTABLISH A FREQUENT PRESENCE
A small manufacturing base allows us to have greater visibility to the factory environments. In addition to our formal third party audits which occur twice a year, the factories are visited multiple times within the year by our compliance team, our commercialization team, our lululemon liaison office, and our quality assurance team.

collaborations and affiliations
lululemon athletica partners with other apparel companies, non-profits, and industry leaders in an effort to learn from each other and accelerate change. We're also collaborating with other brands in the retail industry to tackle topics such as environmental responsibility and factory auditing standards, working as a collective team and sharing global best practices for supporting our factory partners.

the california transparency in supply chains act

On January 1, 2012, The California Transparency in Supply Chains Act of 2010 (SB 657) came into effect. The Act requires retailers and manufacturers doing business in California to disclose their efforts to eliminate, to the extent they may be present, human trafficking and slavery from their direct supply chains. lululemon's efforts in this area include the following:

• verification of our direct product supply chains to evaluate and address risks of human trafficking and slavery. These efforts include a strict Code of Conduct prohibiting slavery, forced labor, human trafficking, under age labor and similar unlawful or immoral conduct. All lululemon direct suppliers are required to certify that they fully comply with the Code of Conduct and must post the Code of Conduct in appropriate language in their workplace. Our audits of those in our direct supply chain, both announced and unannounced, are conducted by trained in-house personnel as well as third parties
• ensuring accountability in our supply chain through the maintenance of records of audits, as well as by taking appropriate actions, up to and including termination of the supplier's contract, for any violation of the Code of Conduct or applicable laws regarding slavery or human trafficking. Any lululemon employee taking part in such wrongdoing is also subject to discipline, up to and including termination

training in the importance of ensuring compliance with the Code of Conduct and applicable labour laws and laws regarding human trafficking and slavery of employees with direct responsibilities for supply chain management