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Lululemon CEO: Retail isn't dead because people 'crave human connections'

  • "Mad Money" host Jim Cramer sat down with Laurent Potdevin, the CEO of Lululemon, for a fresh take on retail.
  • The athletic retailer's success is not so much tied to the pitfalls of competitors like Nike, but to the experience it offers, Potdevin said.
  • With menswear surging in popularity and business in China up 350 percent year over year, Lululemon's long term story is one to follow, the CEO added.

As Lululemon Athletica outperforms its struggling rivals, CEO Laurent Potdevin told CNBC that brick-and-mortar retail won't fade into obscurity anytime soon for one simple reason.

"If you think about the evolution of how people lead their life and the evolution of athletic, mindful lifestyle[s], we know for a fact that people continue to crave human connections," Potdevin told "Mad Money" host Jim Cramer in an exclusive interview on Wednesday. "And they might not go to the mall as much and it's not about the food court or the movie theater, but we know that, ultimately, people don't want to be stuck to their phone and they crave human connections, and that's what our communities do so well."

The CEO said that his company's 2,500 brand ambassadors help Lululemon have its "finger on the pulse" in various communities around the globe and foster human engagement at its 421 physical locations, all of which Lululemon directly controls.

And while Potdevin acknowledged the weakness in other athletic retailers like Nike, he said his brand is different. It doesn't deal in footwear, a common theme among the weaker athletic retailers, he said.

"I always say that we are based in the world of human connection and product and the control of our distribution," he said. "Continuing to lead the market we've created at the intersection of athleticism and mindfulness is a position that we're very, very proud to be in."

A recent partnership with Alibaba's Tmall has bolstered Lululemon's growth in China, which Potdevin said is up a staggering 350 percent year over year.

The CEO said Lululemon plans to tripe its business on Tmall as it lays out a "densification strategy" in top cities like Beijing and Shanghai to pique consumers' interest in its products.

"The beauty of the partnership with Tmall is they share all of the guests – we call our consumers 'guests' – they share all the guest data with the brand. And you combine that with the power of Alipay, and now you actually have a holistic view of your consumers in that market," Potdevin told Cramer, referring to Alibaba's payment processing subsidiary.

And despite its loyal base of female shoppers, Lululemon has also been turning its focus to drawing men to its stores, the CEO said, adding that menswear is growing roughly 23 to 25 percent year over year.

"In so many ways, we're still like a best-kept secret for men, but 30 percent of our new guests are men," Potdevin said. "Anecdotally, in my three and a half years at Lululemon, I've met a lot of guys that don't know that we have men's products, but I've never met a guy that, after trying our product, said, 'It's not for me.'"

So as consumers embrace more athletic lifestyles and seek out style-savvy ways to do so, Potdevin sees the market-wide shift as a chance to continue expanding his rapidly growing business.

"We live at the intersection of fashion and function in a beautiful way, but it always starts with function," he said. "So as long as we start with function and as long as we focus on innovation and deliver value to our guests or solve problems for the athletes that they don't know they have, we win. And it's not a prize proposition, it's a value proposition."

Watch Laurent Potdevin's full interview here:

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