Lululemon Analysis

Based out of Vancouver, Canada, Lululemon is a yoga-inspired athletic apparel retail store that serves women, men, and children. It provides premium quality athletic apparel at a premium price. Along with clothing, it also offers accessories such as yoga mats, blocks, rollers, meditation kits, bags, wraps, and water bottles. (MarketLine, 2017) Lululemon, along with Nike and Under Armour, initiated a trend known as “athleisure.” Athleisure is a term used to describe casual, comfortable clothing that can be used for both exercise activity and everyday wear. Athleisure has become an incredibly popular trend in the past decade that has boosted sales for Lululemon.

Lululemon was founded in 1998 [See Table 1] by Chip Wilson and originally started

At that time, The New York Times conducted a test on the bags and proved that the claims were false and that the bags were actually made of 100% pure cotton with no traces of seaweed. Merely two years later, the company sold bags with inspirational quotes printed on the outside. However, shoppers quickly discovered that once the bag was washed, “less than positive messages were revealed underneath the top layer of text” (CTV News Toronto, 2008). Lululemon responded to customer complaints by offering to stitch a covering over the offensive sayings on the bag, but that did not quell consumer complaints and thus, the bags were pulled from all

suburban outlet” (Lawrence, 2011). The murder and related conviction brought the company and its business practices under even greater scrutiny from the press and wider public. Two years later, in 2013, the company’s most infamous scandal occurred. The founder, Chip Wilson, moved the manufacturing of Lululemon’s products from Canada to Taiwan in attempt to reduce costs and increase margins. “The yoga pants manufactured in Taiwan passed all of the basic metric tests for fabric hand-feel and construction. However, when consumers tried the pants on and began doing yoga poses in them, the transparency of the fabric was noticeable” (Berg, 2014). Customers were outraged at this and felt that their privacy had been violated. Lululemon recalled the yoga pants and publicly apologized to their customers stating that the pants did not meet their standards for quality. The Wall Street Journal published an article about the sheer Lululemon yoga pants stating that “pulling the in-store stock would affect as much as 17% of the product in stock, reducing expected first-quarter sales by millions of dollars” (Mattioli and Jones, 2013). Christine Day, the CEO at the time, stepped down due to the sheer pant fiasco and Laurent Potdevin stepped