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Alex Leikermoser

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You wouldn't blame Alex Leikermoser if she dropped into a position resembling the downward dog when she thinks of the challenge posed by Lululemon Athletica Inc.

Ms. Leikermoser owns Yogagurl, a boutique company that sells yoga fashions, accessories, botanical perfumes, mats and CDs. It also offers yoga classes. The yoga movement is booming, but it is also dominated by Vancouver-based Lululemon, a publicly traded clothing behemoth with a market capitalization of $9.2-billion.

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Yogagurl, on the other hand, is a small business with one location. Based in Toronto, the company has a studio in the Ritz-Carlton Hotel, where it sells its retail products and provides classes. It also holds free weekly courses for the public in David Pecaut Square.

"When a brand like Lululemon comes along and takes over a big share of the market, the market quickly becomes saturated with it," says Ms. Leikermoser, who founded her company a decade ago after yoga helped her overcome a health crisis.

Some consumers want clothing manufactured closer to home, she says. Lululemon makes the majority of its products in developing countries such as Bangladesh, China and India. "They ask, 'Is there another company that can give me this product, but have it made locally?' So in that way there is opportunity for a smaller niche brand like myself."

Yogagurl works with artists, aromatherapists, seamstresses and a manufacturer in the Greater Toronto Area to make its products. It did have a busy retail operation at one point, but the demands of producing large quantities and preparing them to be shipped to destinations as far away as Australia took a toll on Ms. Leikermoser physically and financially. At its height of operations, Yogagurl was shipping between $12,000 and $20,000 worth per month. But Ms. Leikermoser was doing much of the design and packaging herself, and there wasn't enough profit to hire more staff in Canada. She scaled back the apparel sales and focused on the classes in 2010.

Now she wants Yogagurl products to be the focus of the business again. Yet she doesn't want to move her manufacturing operations to China. It was a tactic she tried briefly before, and she didn't like either the results or the ethics. "That decision has forced me to reassess and to find new ways to get my product out there," she says.

The biggest-selling Yogagurl item is a women's T-shirt featuring the company's slogan, "Whine Less, Breathe More." It sells for $55, a price similar to that on competing Lululemon gear, and is available at her studio and online.

"The clothing is a smaller part of the company at the moment, but at one point it was the main part. Currently the yoga services is a larger part. I would like for that to change. Given the right partnership and the right manufacturer, I could see that it could change," Ms. Leikermoser says.

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THE CHALLENGE: How can Yogagurl expand its retail clothing line in an industry dominated by Lululemon?

THE EXPERTS WEIGH IN

Deb Morse, public relations director, Elevation PR

Ms. Leikermoser discovered what she "didn't like" about the manufacturing side of the clothing industry. But before she focuses on finding the right manufacturer and partnership, she should pause and consider what Lululemon and the industry as a whole isn't offering.

Other Canadian players in the yoga clothing industry are on their way to carving out a niche for themselves. One yoga clothing wholesaler is successfully producing high-end, runway-worthy yoga fashion that is locally manufactured and beautifully branded.

Ms. Leikermoser needs to step back, reassess what niche in the industry she can authentically make her own, and boldly, definitively rebrand her clothing line.

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Nigel da Costa, founder, HealthMediaToday.com

Yogagurl has created a good niche with hard-core yoga fans, and Ms. Leikermoser should exploit that position.

To manage costs and expand reach, she should use social media to launch a limited edition "Whine Less, Breathe More" shirt on an invite-only basis. She would reward her 10 best customers with the opportunity to register to purchase one of the shirts. Along with that, each person also receives five invitations for friends. Those invitations are to be shared via Twitter and Facebook. Each invitee will also receive a number of invitations. This will allow Yogagurl to create demand and position the brand as one that engages with yoga enthusiasts.

On the business side, the strategy of using social media would allow Yogagurl to create preorders so there are no inventory issues. It also will build a database that the company can market to as new products are launched. Finally, it is a great boost to their existing social media efforts. All these initiatives combined should help increase demand on the retail side.

Shifting the focus from wanting people to buy your product to people wanting to buy your product will put Yogagurl in an enviable position.

Janet Boileau, publisher, Taste & Travel Magazine, Metcalfe, Ont.

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In a David-and-Goliath situation you have to think strategically about your strengths and weaknesses and how you can turn these to your advantage.

Many people thought I was crazy to launch Taste & Travel as a print magazine when everyone else was moving to digital platforms, but instead of trying to elbow my way into the crowded digital market I went around it. I thought that the blogosphere would reach a saturation point, and there would be a backlash, which would increase interest in a print magazine. Turns out I was right.

Ms. Leikermoser has Yogagurl well positioned to take advantage of the overexposure of the Lululemon brand. Yogagurl is a small company, the products are locally made, and the designs are unique. The Yogagurl T-shirt is the antithesis of a Lululemon product. If Yogagurl clothing is made in Canada, the economic equation is going to be tougher, but the payoff is a strong selling point and a major advantage in a competition with Lululemon, which has to combat all the negatives that come with big business and offshore manufacturing.

I'd suggest an investment in developing a self-branded e-commerce application to sell the apparel on the Yogagurl website. Get those fantastic designs on display where people can see them, emphasize the "Made in Canada" label and the "small is beautiful" manufacturing principle, concentrate on quality rather than quantity – and I think the products will sell themselves.

THREE THINGS THE COMPANY CAN DO NOW

Go for the niche

Home in on the niche market for Yogagurl products by refining your brand.

Use social media

Incorporate social-media campaigns to build brand loyalty.

Improve the Web retail experience

Create an e-commerce application to sell more products online

Facing a challenge? If your company could use expert help, please contact us at smallbusiness@globeandmail.com. Follow us @GlobeSmallBiz and on Pinterest. Join our Small Business LinkedIn group. Add us to your circles. Sign up for our weekly newsletter.

Interviews have been edited and condensed.

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