Downward dog reveals sheer extent of Lululemon’s mistake
There’s an embarrassing reason the sheerness of some Lululemon pants wasn’t noticed until they hit store shelves and customers began putting them to work.
“The only way you can test for the pants is put the pants on and bend over,” Lululemon Athletica Inc. CEO Christine Day said Thursday during an earnings call with investors.
The defect becomes obvious only when the fabric is stretched in multiple directions, as it is during a routine downward dog yoga move.
“It has to be engaged in a four-way stretch for the sheerness to appear. It’s a very complex thing to test for,” Day said.
“It passes all the metric tests and the hand feel is relatively the same. It wasn’t until we got it to the store and started to put it on people that we could actually see the issue.”
Lululemon Athletica Inc. announced Monday it was recalling 17 per cent of women’s bottoms made with the company’s trademarked Luon fabric after they were found to be too sheer when put to the downward dog test.
Not all Luon products were affected, Day said, just the Groove pants and Wunder Under pants — the black pants in particular — and some seasonal items.
“This is really about the core product,” said Day, dismissing the possibility Lululemon was focusing too much on innovation and expansion, allowing standards to slip.
Downward dog consists of keeping hands and feet flat on a floor mat while bending the head to the ground, spreading both feet apart and popping up the bum.
“It brings a whole new level of signage to the gym, doesn’t it,” said Toronto stylist Rachel Matthews. “Please assume downward dog in the mirror and if you see more than you’d like to, please change.”
Matthews said she never noticed any problems at yoga studios she attends.
“Quite often, the lights are quite dim in a studio. That can really help you out. That may be the saving grace.”
The snafu could cost the company from $57 million to $67 million in lost revenue in 2013, said John Currie, chief financial officer for Lululemon Athletica Inc.
It’s an embarrassing problem for the Vancouver-based retail juggernaut with a devoted fan base and enviable sales figures. But investors, after punishing the stock on Tuesday morning, seem to be regaining confidence that the brand will recover, sending share prices up1.28 per cent on the NASDAQ, to $64.7 (U.S.) by the end of Thursday.
The sheerness snafu could cost the company from $57 million to $67 million in lost revenue in 2013
Lululemon ran into problems with bleeding dye in some bright-coloured fabrics last year. Day said that problem was solved, and the problem with sheerness will be, too.
She said more and better quality control is being put in place, including a new director of quality control, third-party testing and a team in Taiwan to establish a presence in the factories there. Customers are being offered refunds. “We look forward to updating you with more information as soon as we get it,” Day said at the end of the call.
“We just want to reiterate our commitment to being completely transparent and passing the information as we learn it so that you can have confidence and faith in us.”