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Lululemon employee Laura Struve helps Maureen Eyers (left) with yoga clothing at the Kitsilano store, 2113 W4th Avenue in Vancouver, BC. (Laura Leyshon/The Globe and Mail)
Lululemon employee Laura Struve helps Maureen Eyers (left) with yoga clothing at the Kitsilano store, 2113 W4th Avenue in Vancouver, BC. (Laura Leyshon/The Globe and Mail)

Marketing

Lululemon Canada's fastest-growing brand Add to ...

Canada’s banking sector has won international presence and recognition, and the Blackberry name is known worldwide -- but according to a new report, Canada’s fastest-growing brand is built on pricey yoga pants that flatter the bum.

Lululemon has vaulted into the top 10 in the ranking of the Best Canadian Brands 2012. The Canadian list, compiled by Omnicom Group-owned brand consulting firm Interbrand, is published every two years, and since 2010 the retailer of yoga and exercise apparel has seen its brand value nearly triple.

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While other brands on the list are bigger, the growth story provides an interesting snapshot of a Canadian brand giant still on the upswing, with plenty of ground to be made in international markets as well. In the past two years, Lululemon overtook such Canadian stalwarts as Bombardier Inc. and Canadian Tire Corp.

“They’re more than apparel. They’re a lifestyle ... they do so much,” said Interbrand’s managing director in Canada, Alfred DuPuy.

Mr. DuPuy highlighted the strong growth in brand value over the past two years in Canada. The 25 companies that made the list saw brand value jump by 24 per cent from 2010. Mr. DuPuy believes that the list demonstrates the way that investing in marketing can provide real financial results for companies.

The list is based on the companies with the biggest “brand value,” or the slice of a company’s economic performance that can be attributed to its marketing and branding power. That means that larger companies tend to have an easier time making the top of the list -- part of the reason the Big 5 banks are such a large presence, for example. But relatively smaller companies can gain a presence through exceptional marketing; and some large companies, such as Air Canada for example, do not make the list.

(The list does not track private companies, since its calculations rely on financial information. In Interbrand’s global reports, there are some private companies included if they provide financial data.)

TD and Scotiabank have both done a good job of creating broader international reach, for example, and because of that larger presence, they account for more brand strength. TD’s strategy of marketing a more comfortable experience for customers has been effective for the bank as well, Mr. DuPuy said.

Interbrand’s Top 10 Canadian Brands for 2012

1. Toronto Dominion Bank

-Brand value $9.69-billion

-Compared to 2 years ago when this list was last tabulated: up 45%

-2010 placement on list: 2nd

2. Thomson Reuters*

-Brand value: $9.55-billion

-Compared to 2 years ago: + 1%

-2010 placement on list: 1

3. Royal Bank of Canada

-Brand value: $7.93-billion

-Compared to 2 years ago: + 28%

-2010 placement: unchanged

4. Research in Motion Ltd.’s Blackberry*

-Brand value: $6.45-billion

-Compared to 2 years ago: + 7%

-2010 placement: unchanged

5. Scotiabank

-Brand value: $3.97-billion

-Compared to 2 years ago: + 84%

-2010 placement: 9

6. Tim Hortons Ltd.

-Brand value: $3.44-billion

-Compared to 2 years ago: +30%

-2010 placement: unchanged

7. Lululemon Athletica Inc.

-Brand value: $3.245-billion

-Compared to 2 years ago: +292%

-2010 placement: 17

8. Shoppers Drug Mart Corp.

-Brand value: $3.18-billion

-Compared to 2 years ago: -7%

-2010 placement: 5

9. Bell

-Brand value: $3.06-billion

-Compared to 2 years ago: +25%

-2010 placement: 7

10. Rogers Communications Inc.

-Brand value: $3-billion

-Compared to 2 years ago: +32%

-2010 placement: 8

*Interbrand’s policy for these rankings is that it only re-values rankings once a year. Since TR and Blackberry are also on the firm’s Best Global Brands list, these values are from the 2011 global ranking, published late last year.

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EXACT CALCULATION, if you’re curious about these numbers:

(Operating profit - taxes) - capital charge = the brand’s economic profit

Economic profit x “role of brand index” (accounting for what portion of earnings can be attributed to brand value) = brand earnings

Brand earnings x brand-specific discount rate = Brand value as listed in the table (arrived at by taking forecasted earnings, multiplied by the role of the brand, and discounted back to present value, totalled to arrive at brand value)

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