Lorna Jane

Lorna Jane Pty Ltd
Private
Industry Retail
Founded 1990
Founder Lorna Jane Clarkson and Bill Clarkson
Headquarters Brisbane, Queensland, Australia
Key people
 Lorna Jane Clarkson (Chief Creative Officer), Bill Clarkson (CEO)
Products Athletic apparel
Revenue AUD$ 200 million[1] (2014[1])
Profit AUD$ 19.6 million[2] (2013[2])
Total equity AUD$ 500 million (estimated)[3] (2016[3])
Owners
Number of employees
 1,800[4] (2015[4])
Website lornajane.com.au

Lorna Jane is a manufacturer and retailer of women's activewear, founded by Lorna Jane Clarkson and her husband, Bill. In 2016, the overall value of the business was estimated at $500 million,[3] with an annual revenue for 2014 estimated at $200 million.[1]

By 2015, the chain included 146 stores in Australia,[1] 42 in the United States,[1] and 54 stockists in other countries[1] including South Africa, Britain, Canada, and Dubai.[5] Larger stores ("Active Living Rooms") incorporate fitness studios ("Move Studios") and health food cafés ("Nourish Cafes").[6] The company headquarters and main warehouse are located in Brisbane, Australia, with regional offices in the US, Hong Kong, Shanghai, and Singapore.[6]

The brand releases between 70 and 100 new designs every month.[7][8] In 2014, they sold, on average, one pair of their "Flashdance" pants somewhere in the world every 27 seconds.[9]

The origin of the Lorna Jane logo: a stylised L and J

The company logo is three rhombuses, each with two of its opposing corners curved. The shape represents a stylised "L" and "J" joined together, and three of them together recall the company motto and mantra "Move Nourish Believe".[10][11]

The company does not invest heavily in above-the-line advertising, preferring to rely on word-of-mouth and building customer engagement through social media.[12]

One unusual feature of the company's finances is that it carries no debt,[12] a philosophy that Clarkson says she follows in her personal as well as professional life.[13]

Products

Model wearing Lorna Jane activewear

Lorna Jane produces and sells a wide range of garments, including tights, sports bras, tops, shorts, pants, jackets and hoodies, shoes, and various accessories.[14] Many items use the company's own moisture-wicking four-way stretch fabric, "LJ Excel".[7][9] Others incorporate compression fabrics and "power mesh" panels aimed at adding stability, support, and smoothing to the thigh and stomach areas.[9] Every Lorna Jane garment has a small heart-shaped bead sewn into it somewhere; a message to consumers that the garment is made "with love".[15][7] Garment styles are named after Lorna Jane team members, with one team member saying "Seeing your name pop up on a monthly style sheet is as exciting as waking up on Christmas morning!"[7]

Garments were originally produced in sizes up to "L", and in 2014, Lorna Jane introduced an "XL" size.[16] Beyond that, Clarkson has said she had no plans to produce "plus size" garments, saying that there was no demand from her customer base and that the brand's previous ventures in this direction had been unsuccessful; "If my customer wanted bigger sizes, I would absolutely accommodate. But we have tried it and not sold it."[17] However, in November 2016, the company published a photo of a model with a "curvy" physique in Lorna Jane garments on their Instagram feed.[18] The photo quickly garnered 16,000 "likes".[18] The company followed up by inviting consumers to register their interest in Lorna Jane garments "outside of the standard range."[18]

In 2015, Australian consumer organisation Choice evaluated a pair of Lorna Jane tights alongside equivalent garments from six competitors at a range of price points. The evaluation found that the Lorna Jane tights did not fare as well in fabric tests as some of their much cheaper competitors, although a textiles expert praised them for their construction.[19]

Since before 2012,[20] Lorna Jane garments are produced in Lingbao, China. Three factories there produce exclusvely for the brand[20] and are operated in partnership with DuPont, which produces the yarn.[12] The company prides itself for providing superior conditions for its factory workers,[12] and claims that only three workers fail to return from Chinese New Year each year, when the norm for factories in the region is "hundreds".[12] Workers refer to the factories as "Lorna Land".[12] Despite this, the 2016 Ethical Fashion Guide produced by Baptist World Aid Australia rated Lorna Jane as "D" grade (on a scale from A to F) on forty criteria related to slavery and workers' rights issues, and noted that the company was unresponsive when questioned about these matters.[21] Neither did the company respond when the Sydney Morning Herald asked for a comment on the report,[22] but executive marketing and e-commerce manager Jessie Dean told Australian broadcaster the ABC that "It is important to us that our manufacturing source reflects who we are as a brand and our active living philosophy. We continually work together to ensure that our workplace code of conduct protects the welfare of every employee and our environment."[23] Clarkson says she would prefer to be still manufacturing in Australia, but the closure of Australian fabric mills and a lack of government support for the clothing industry made that impossible to sustain.[12]

Despite being asked "two or three times a week",[24] Clarkson said she has no plans to expand into activewear for men, saying that men should work out in their regular clothes but that women should look fashionable.[25] In another interview, she expressed her personal preference as "I sort of like men to wear their old footy shirts and triathlon shorts."[26]

History

Foundation

The present (2017) Lorna Jane shopfront in Brisbane's Queen Street Mall, close to the former location of the first Lorna Jane store

Founder Lorna Jane Clarkson (née Smith) was a dental technician and part-time aerobics instructor who was dissatisfied with the workout clothes available to women in the late 1980s and started making her own.[27][5] Her designs proved popular with her students, who asked her to start making clothes for them too.[27][5] In 1988, she decided to start making clothes as her full-time occupation.[27][5] When she and her partner, Bill Clarkson, experienced difficulty finding stores interested in carrying the range, they decided to retail it themselves[27][5][17] In 1990, they opened their first store,[27][5][17] in an upper floor[28] of Brisbane's Broadway on the Mall shopping centre.[28][3]

By 2000, the business required a larger factory, and to fund this expansion, the Clarksons sold their home and bought a building in Fortitude Valley[29] for $465,000.[3][30] They refurbished it and within two years, the value of the property had appreciated to $4 million, which the Clarksons were able to use as collateral for further growth.[29]

Expansion and diversification

The company was able to use the Global Financial Crisis of 2008 to its advantage.[31][13] Rather than waiting for economic conditions to improve, Lorna Jane continued its expansion by taking opportunities for leases in favourable locations that would have been unavailable to the company in a stronger climate.[31][13] This strategy led to the company's biggest growth period.[31]

In 2010, private equity firm CHAMP Ventures purchased a 40% stake of the company.[32]

In response to the 2010–11 Queensland floods,[33] Lorna Jane initiated a charity programme where the company would allow customers to exchange used activewear (of any brand) for a store credit.[20][33][34] The used clothing collected would then be donated to the Salvation Army.[20][33][34] Originally intended to run for a week in mid 2011,[33] the "Swap Shop" became a permanent fixture and was still running in 2017.[34] In that time, customers had brought in over 45,000 garments for the business to pass on to charity.[34]

Following a year-long consultancy with the Wharton Business School and the University of Queensland into strategies for entering the US market,[20] March 2012 saw the opening of the first US store[35] in Malibu.[12] At a time when ecommerce was replacing traditional bricks-and-mortar retailing, Lorna Jane adopted the unconventional approach of investing more in physical stores.[12] By mid-2013, a new Lorna Jane store was opening in California every three weeks.[12] The Clarksons chose California as the brand's initial entry point to the US because they found the active and outdoor way of life there to be similar to Australia.[20]

In August 2012, Lorna Jane launched a fitness tracking app.[36]

By 2013, the company took a 9.4% share of the entire athletic clothing industry in Australia.[12] Consolidated revenue for 2012-13 was set to exceed $110 million.[12] Annualised growth was sustained above 40% for the five years between 2008-13.[12] In the same year, the company introduced the "Active Living Rooms", with the first one opening at the Gasworks development in Teneriffe, Queensland,[37] and also launched a fashion-forward range named "Uniquely" that further blurred the line between activewear and casualwear.[15]

2014

In early 2014, the Clarksons and CHAMP considered the possibility of an initial public offering, with bankers pitching exit strategies for the private equity firm.[2][38] The float was reportedly aimed at returning $400 million to the business owners.[38][39] Analyst Brian Walker suggested that the motivation for the float might have been a specific timeframe within which CHAMP had to return funds to investors, or that CHAMP had predicted a peak in Lorna Jane's rate of growth and were opting to exit at this point.[40] When reports of a float started appearing in the financial press in February, neither the Clarksons nor CHAMP would comment.[40] However, on 19 March, CEO Bill Clarkson confirmed for the Financial Review that an IPO had been considered and rejected.[41] In May, the Financial Review reported that CHAMP's board scrapped the idea of an IPO after receiving at least five expressions of interest from large US businesses in the fitness industry[42] and appointed Credit Suisse to negotiate a sale instead.[2][42] Over the next four months, they received interest from over forty prospective investors,[8][43] including Under Armour and Foot Locker.[44][43] European private equity firm Permira emerged as the leading contender by mid-September.[2] Ultimately, however, the Clarksons withdrew from a sale when they considered the implications of losing their personal control of the brand.[8][43] They opted to retain a controlling interest, and CHAMP agreed to maintain its level of investment.[8][43]

In March 2014, the company partnered with department store chains in Australia and the US to start carrying the brand. In Australia, the partnership was with David Jones,[15][45] and included the "Uniquely" line in in-store concessions.[37] In the US, the partnership was with Nordstrom, and additionally included representation in one Nordstrom store in Canada and another in Puerto Rico.[41]

In July 2014, a change.org petition started by Megan Sauer asked Lorna Jane to add larger sizes to its range.[16] The petition attracted 2,705 signatures,[16] and resulted in the brand adding a new size, XL.[16][46][47] This size falls between Australian women's clothing sizes 14 and 16, when the average Australian woman is size 16.[46]

In August 2014, the company ventured into publishing, with a six-weekly magazine titled Active Living available through its stores.[48] The initial print run was 75,000 copies.[48]

In August 2014, Lorna Jane began registering its designs for garments and accessories with Intellectual Property Australia as a pre-emptive step to help protect them against copyright infringement.[44][49][50]

2015 to present

Controversy over job advertisement for combination "receptionist/fit model"

In July 2015, the company experienced a backlash over an advertisement for a job vacancy on Seek for a "receptionist/fit model" that specified maximum body dimensions of a bust of 87–90 cm, waist no bigger than 73 cm and hips 97–100 cm.[51] Critics questioned the genuineness of the fit model duties and accused the company of including this element to provide a basis on which to hire a receptionist of a particular body type.[51][52][53] A Brisbane lawyer specialising in workplace and employment law said the ad "almost looks like a job ad for a receptionist in the 1960s,"[54] and psychologist Dr Michael Carr-Gregg called the advertisement "completely insane", linking it to the promotion of an unhealthy body image.[55] Lorna Jane defended the ad and insisted that the fit model requirements were a genuine vacancy within the business that was being combined with the receptionist position out of a desire for efficiency, since both positions were only required on a part-time basis.[51][52][53][54][55] The ad was taken down after two days, which Lorna Jane claimed was due to the company having received a sufficient number of applicants for the position.[56][52][53][54] When Clarkson launched her new book, INSPIRED, the same day, media were barred from the event unless they had purchased a ticket two months previously, despite being assured earlier in the week that they could attend the launch breakfast. [57] Lorna Jane staff told reporters that Clarkson was "too busy" to answer questions about the controversial advertisement, and that "Today is all about her fans."[57] Clarkson later said that, in hindsight, she wished the ad had been worded differently, and speculated that the word "fit" had been miscontrued by critics to mean "physically fit" rather than a model to test-fit clothes.[58]

In the days following the incident, Brisbane newspaper The Courier Mail reported being contacted by former Lorna Jane employees who claimed that a culture of "hideous bullying" was common within the company.[59] Former staff alleged "standover tactics" from senior staff, constant "harassing phone calls" from head office, discrimination based on employees' body shapes, and direct orders to never speak to Lorna Jane Clarkson during her store visits unless spoken to.[59] Lorna Jane declined to comment on these claims.[59]

Bullying allegations by ex-store manager Amy Robinson

In September 2015, Amy Robinson, a former manager of the Lorna Jane outlet store at the Brisbane Airport DFO centre, commenced legal action against the company, complaining that she was bullied regularly when she worked there for six months in 2012.[60] She alleged that the bullying was aimed at her weight and that she and others were encouraged to skip meals and live on coffee.[60] She said that the bullying left her depressed, that her self-confidence was destroyed,[60] and that she had become suicidal.[61] She sought over $500,000 in damages.[60][61] The company denied the allegations.[60][61]

The case went to trial in the Brisbane District Court on 14 February 2017.[62] Apart from the alleged bullying over her body size, Robinson claimed that she was also physically injured at work by having to lift heavy boxes,[62][63][64] and that she was required to work past the ends of her shifts, which incurred extra childcare costs for her.[63][65][64] Rebecca Treston QC, representing Lorna Jane pointed out that in a twelve-page letter to management in 2012, outlining various grievances, Robinson had not once mentioned being bullied over her weight.[64] Treston also pointed out that of the 25 occasions on which Robinson signed out after her shift finished at 6:00PM, 23 instances fell between 6:01PM and 6:06PM,[65][66][64] prompting Judge Gregory Koppenol to ask, "You're seriously complaining about working an extra minute on November 2, 2012, and an extra two minutes on [another occasion]?"[65][66][64] The same timesheets showed Robinson signing out before 6:00PM on 29 occasions.[65] Responding to Robinson's evidence that she had told her doctor that whenever she saw Lorna Jane clothes or logos she would start shaking and experience heart palpitations, shortness of breath, and sweating, Treston pointed out a recent Facebook post by Robinson showing a photo of her daughter dressed in Lorna Jane garments.[65] Lorna Jane's defence denies that Robinson suffers a psychiatric disorder from her work, and that any impairment of her capacity for work is due to haemorrhoids not connected with her work, and pre-existing psychological disorders including personality disorder, borderline personality disorder, and obsessive compulsive disorder.[67]

The hearing was adjourned until May 22, when the court was to hear evidence from medical experts.[67] The court also ordered Robinson to provide Lorna Jane's lawyers with her Facebook log-in credentials so that they could search for further evidence relevant to the case.[67] Appearing for the defence, clinical psychologist Dr Ursula Oertel described Robinson as having low self-esteem, a distrust of other people, a tendency to feel that she is being treated unfairly, and a tendency to hold grudges.[68]

On 8 October 2015, a Brisbane teenager, Lydia Jahnke, complained that Lorna Jane had used an image of her without her permission.[69][70][71][72] Jahnke, a Lorna Jane fan,[70][71][72] had posted an image of herself on her Instagram account, in which she was wearing a Lorna Jane shirt and standing in a triumphant pose after climbing Mount Mee.[69][70][71][72] Lorna Jane later printed the image on a shirt, accompanied by the slogan "The woman on top of the mountain did not fall there".[69][70][72] Although Jahnke said she was initially "pretty excited" to see her image on a Lorna Jane garment, she was disappointed that the company had not asked her permission to use the photo on its product.[69][70] Jahnke said the company claimed that she had known about the use of the image before the shirts went into production, which she denied.[69][70] Jahnke sought advice from Brisbane law firm Simpsons Solicitors and considered suing Lorna Jane for copyright infringement[69][70][71][72] before the matter appears to have been settled out of court.[72]

Impersonator asks women for revealing photos

On 16 October 2015, a 32-year-old Gold Coast psychologist (kept anonymous in press reports) said that she had received unsolicited contact from a man who claimed to be representing Lorna Jane, offering her work as a model.[73][74] The man, who identified himself as "Victor" first made contact via telephone, and arranged a Skype interview with her.[74] "Victor" asked that she send him photos of herself in Lorna Jane sports bras and shorts, which she did,[74][75] later recalling, "I was so excited about the possibility of being in a Lorna Jane catalogue as I adore the brand and what it stands for so sent the photos through."[75][76] "Victor" claimed that Lorna Jane was interested in her story because of how she maintained an active lifestyle while living with rheumatoid arthritis.[74] In a subsequent phone call, "Victor" told her that she would have to lose another 5-6 kilograms, would have to hide the bandages and gloves she wears to support her arthritic wrists, and would require Botox injections to hide her wrinkles before she could model for Lorna Jane.[73][74][76][77] At this point, the woman did not want to pursue the offer further and told "Victor" to "go fuck himself".[74] The woman said she had been left with no doubt that the man was acting on behalf of Lorna Jane,[73] and commented on his professional appearance and demeanour during the Skype call.[74] She posted an account of the conversation on Facebook which was widely shared.[73][74][77] When approached by the media to comment on the incident, a Lorna Jane spokesperson said that the story was "completely untrue"[73][77] and that the company was "not prepared to be threat[en]ed by people that lie."[73][77] She also speculated that the woman might have confused Lorna Jane with another activewear brand, because Lorna Jane only deals with modelling agencies and does not approach models directly.[73] The woman was surprised at Lorna Jane's response.[73] After direct contact between the woman and Lorna Jane, the company revealed that other women had been approached by the same man,[74][77][75] including two yoga instructors in Hobart,[77] and that they were working with Queensland Police's Cyber Crime Unit.[74][77] Lorna Jane expressed disappointment that initial media accounts had not reported on the fraudulent nature of "Victor's" requests and had accepted the victim's impression that he was a Lorna Jane representative at face value.[75][76] The victim said she was "embarrassed" to have been scammed, and felt sorry for Lorna Jane that the media would have reported that a Lorna Jane representative would have said "such awful things."[77]

Exploitation claim by ex-employee Vanessa Croll

In November 2015, ex-employee Vanessa Croll complained in Newscorp opinion site RendezView that she had been "used" by the company.[78] While employed as a personal trainer by the business over ten years previously, Clarkson asked her whether she would be willing to model clothes for the catalogue.[78] Croll agreed, but after completing the photo shoot, was only offered $70, which she felt was inadequate.[78] Nevertheless, she continued to work as a trainer for Lorna Jane and accept occasional modelling work, always for what she believed was a low rate of pay and occasionally, sample clothes.[78] She also alleged that CEO Bill Clarkson had berated her for accepting personal payments from gym customers, and singled her out at a team meeting as an example of someone with an "attitude problem".[78] Croll accepted one final modelling offer for $150 and then sought other employment.[78] She says that she later learned that the shoot was intended to re-create a previous image taken by a photographer who had wanted to be paid for their work.[78] This image, of Croll running up a long staircase at the Kangaroo Point Cliffs was reproduced as a larger-than-life-size wall graphic at many Lorna Jane stores.[78] A Lorna Jane representative responded to the complaint via a Facebook post, explaining that Clarkson had offered Croll the modelling opportunities to support her ambitions to be a model, and that the small payments reflected the small business that Lorna Jane was at the time.[79] The post also claims that Croll did not mention any of these concerns at the time, and branded her "an opportunist trying to benefit from Lorna’s success".[79] Most of the early replies to the Facebook post suggested that this was not a helpful response to Croll's accusations.[79] The day after RendezView published Croll's piece, editor Sarrah Le Marquand claimed that the site had been "inundated" by other former Lorna Jane employees wanting to share stories about their time with the company.[80] Other media responses criticised the tone of Lorna Jane's response on Facebook as "defensive and slightly aggressive"[81] or highlighted the pitfalls of accepting offers of payment for creative work in terms of "exposure".[82]

Criticism by Universal Society of Hinduism over yoga fee

In December 2015, the president of the Universal Society of Hinduism, Rajan Zed, issued a press release criticising Lorna Jane and Sydney Airport for charging fees for yoga classes that passengers could take at the Lorna Jane Active Living room there.[83][84] In the statement, Zed said, "charging fee for it [yoga] at a public facility like Sydney Airport did not seem right."[85] Sydney Airport responded that the space was operated by Lorna Jane, not Sydney Airport, but that it was free for passengers to use outside of class times.[84] Lorna Jane responded that the company was supportive of anything that encouraged passengers to look after their health.[84]

27°25′56″S 153°05′17″E / 27.4322855°S 153.0880405°E / -27.4322855; 153.0880405 (Lorna Jane corporate headquarters)Coordinates: 27°25′56″S 153°05′17″E / 27.4322855°S 153.0880405°E / -27.4322855; 153.0880405 (Lorna Jane corporate headquarters)

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  83. ↑ "Lorna Jane In Trouble Again For Airport ‘Active Living Room’". B&T. The Misfits Media Company. 2015-12-11. Retrieved 2017-02-26.
  84. 1 2 3 Sullivan, Rebecca (2015-12-11). "Universal Society of Hinduism criticises Lorna Jane over ‘wellness lounge’ at Sydney Airport". news.com.au. Newscorp. Retrieved 2017-02-26.
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