Exec is forced to wear Lululemon pants fiasco
Veteran retailer Sheree Waterson seems to be taking the fall for the seethrough pants debacle at Lululemon Athletica Inc., which will cost the Canadian company an estimated $67-million this year, analysts say.
But those same analysts, and diehard fans of the brand, wonder what the move means for the future of the company.
Waterson, 57, the company’s chief product officer, was hired by Lululemon CEO Christine Day in 2008. Two weeks after a massive recall of one of the brand’s signature fabrics, it was announced Wednesday that Waterson will leave the firm April 15.
“Since Ms. Waterson led the product organization, the current Luon issue, as well as other recent quality issues, are ultimately her responsibility; likely contributing to her departure,” said a note from analysts Howard Tubin and Tal Woolley at RBC Dominion Securities Inc.
There were problems at Lululemon last year with dye leaking from some brightly coloured pieces.
According to public documents, Waterson received $1.486-million in compensation from Lululemon in 2011, including a base salary of $425,548, stock options and other incentives. She has a15-month noncompete and non-disparage clause in her contract and, depending on the reason for her departure, will continue to collect her base salary for up to 15 months after leaving.
In an interview posted to the Lululemon community blog last year, Waterson answered questions about her all-black wardrobe (including black nail polish and accessories) and hinted at a black shoe collection “in the triple digits.”
“My clothes are all black and my environment has to be white. I admit. I send myself white flowers. I need a clean blank canvas to create so that ADD doesn’t creep in,” she said in the interview. “Truthfully, I am so wrapped up in work that the thing that I really care about — really care about — is that the team that I work with is the most inspired, happiest team in the world. That is it. I can’t think of anything else that I’d rather have. Except more yoga. Do more yoga.” She could not be reached for comment on Thursday and Lululemon declined to comment on her exit. Before joining Lululemon, Waterson was president of Speedo North America, where she tried to “layer the cool factor over the technical prowess” of the brand that included a small, tight swim brief for men. Her exit left diehard Lululemon fan and blogger Christina Chalmers wondering about the future of the company’s products. “I’m a bit surprised that Sheree Waterson was eliminated as she has 25 years of experience in the consumer and retail industry . . . Whatever the change, I hope this is a sign of drastic return back to the quality and sophisticated designs and materials that Lululemon used to be.” Chalmers and other Lululemon enthusiasts have complained of a decline in quality of some of the products, including the Luon fabric, that predates the dye issues and the see-through yoga pants. The pants were see-through in the “downward dog” yoga position.