Gabriel Gomez & Lululemon: Child Labor as the Solution to “Excessive Regulation”

Looking closely at Gabriel Gomez’s web site—an endeavor which takes all of about three minutes and which provides exactly zero calories –I was intrigued by the reference to the only company he cites as a personal success story during his years with Advent International:

He also helped grow smaller, regional businesses into national, household names – like apparel company Lululemon. He experienced how onerous taxes and excessive regulation are barriers to job creation. He also learned what it takes to help businesses and employees prosper and thrive.

Sounds good to me. Gabe helped take a small American mom-and-pop shop national, ensuring that its employees get something approximating a living wage, and otherwise helping them to “prosper and thrive.”

Except that that isn’t the story. According to the Wikipedia entry, “Lululemon has its main factory in Vancouver, British Columbia, Canada. In 2004, production expanded outside Canada and currently takes place in factories in the United States, China, Israel, Taiwan, India, Thailand, Peru, and Indonesia.” In fact, while “until recently, Lululemon produced most of its clothing in a non-union shop in East Vancouver,” now, “in response to … its growing market, Lululemon hopes to produce half its merchandise in China by the end of the year.” Or, as the Lululemon web site has it, “Global economic forces … have shifted manufacturing to more cost-attractive locations and resulted in closures of some domestic factories.” Oh. The Advent web site explains it this way: “Advent International’s partnership with the company is a classic example of how we can support management in achieving their goals of international expansion and product growth. “Classic example,” indeed — Advent has nothing on Bain. So this is Mr Gomez’s poster-company for the new economy? (BTW, Advent dumped most of its stock in lululemon as soon as the contractual lock-up period expired and share prices plunged).

Why is this important? Because it goes beyond the non-union and non-US location and right to the heart of the matter of those pesky regulations — you know, like the ones regarding child labor–and exporting jobs to what Lululemon’s CEO quaintly refers to as “The Orient”: Lululemon founder Dennis “Chip” Wilson is also a champion of child labor. Yeah, you read that right — Chip not only defends his company’s use of child labor, but even suggests that 12-year olds in Canada should be working in factories.

But this is no suprise, seeing as how Chip’s business practices were inspired by — you saw this coming? — Ayn Rand. The company’s blog boasts that he first read Atlas Shrugged whe he was 18, and that “Only later, looking back, did he realize the impact the book’s ideology had on his quest to elevate the world from mediocrity to greatness (Lululemon’s company vision)….”

In “Atlas Shrugged,” Ayn Rand describes a society where people work and reside in government-controlled environments that are tightly regimented. Without realizing it, this control created a society of mediocrity; propagating a cycle of listless, uninspired existing as opposed to living. The character John Galt encouraged all of the world’s innovators and intelligent minds to go on strike from the increasingly controlling government in order to create a vacuum of brilliance, proving that independent creativity and free-will is critical for quality of life… Our bags [Luluelom sells a bag emblazoned with that exhausted “Who is John Galt?” slogan] are visual reminders for ourselves to live a life we love and conquer the epidemic of mediocrity. We all have a John Galt inside of us, cheering us on. How are we going to live lives we love?”

Wilson, incidentally, is personally worth 3.5 billion.

Let’s go to re-write:

He also helped grow non-unionized Canadian businesses – like apparel company Lululemon -into national brands. He experienced how taxes and regulation are barriers to job creation, which led to Lululemon exporting most of its manufacturing jobs overseas, primarily to China. He also learned what it takes to help businesses thrive, as explained by Lululemon’s child-labor advocate and Randian disciple CEO

Of course, it could be that I’m attributing too much to Mr Gomez. Or rather, that he is. It was, after all, Advent exec and former Reebok CEO Robert Meers who “joined lululemon in December 2005 and was instrumental in establishing the strategic platform for the lululemon brand and its growth throughout North America and internationally. He assembled the senior management team and, under his leadership, led the Company through its IPO in July 2007.” As CNN reports, “But here’s the thing about Gomez: In nearly nine years at Advent, he appears to have led only one deal and represented Advent on just four boards of directors (three of which were investments that predate his 2004 arrival at Advent). The only private equity deal mentioned on Gomez’s campaign website is apparel company Lululemon (LULU), where he was involved on sourcing but was not one of two Advent investors who joined its board…”

But, hey, if Lululemon is your blueprint for the way companies ought to work, run with it, Gabriel.

As an amusing aside, Lululemon’s founder also has some very interesting thoughts, directly related to his company’s “mission” and “marketing,” on the relationship between the Pill, smoking, women wearing suits with big shoulder pads, divorced fathers, and fashion. As a result of the Pill having “immediately transformed the sex lives of anyone under the age of 40, particularly teenagers,” “the 1980’s gave way to Power Women dressing like men in boardroom attire with big shoulder pads. They went to 3 martini lunches and smoked because this is what their `successful’ fathers did in the business world.” Meanwhile, “Girls raised by Power Women knew that education was essential because when they got divorced they too would need enough income to manage a house and a job at the same time. I term the daughters of Power Women `Super Girls,’ who “spent weekends with a divorced father who had no training on how to be with a daughter for two straight days.” What does all this have to do with selling high-end yoga pants? “This sexy, powerful and equal woman became an icon to Super Girls who were doing what most teenagers do – dressing opposite to their mothers. They did not have the same need to look like boys or men to compete with them. In the early 1990’s, girls abandoned the grunge/skateboard/snowboard/male dominated sport look and moved towards tighter tops and more feminine colors.” End result: “Ultimately, lululemon was formed because female education levels, breast cancer, yoga/athletics and the desire to dress feminine came together all at one time. lululemon saw the opportunity to make the best technologically advanced components for the Super Girl market.” (This blog post is worth reading in its entirety, as are some of Chip’s other reflections on “greatness,” etc).

(Wilson has also noted that Chinese seamstresses “get angry” when you only allow them to work 8 hour shifts; and he wanted a company name with three “L’s” because, in his view, Japanese people have difficulty pronouncing the letter “L,” which thereby enhances its cachet as a clearly “American” brand, never mind that the stuff is all produced just across the East China Sea; he also noted that “It’s funny to watch them try and [sic] say it”

Hoping to see the Markey campaign steal a page from Obama–remember?: “[Romney’s] experience has been owning companies that were called ‘pioneers’ in the business of outsourcing jobs to countries like China. He made money investing in companies that uprooted from here and went to China.”