Lululemon Gets Pantsed

Discussion
Mar 19, 2013

Lululemon Athletica, the trendy yoga apparel chain, is having growing pains. The chain, which has admitted it faced out-of-stocks during the holiday selling season as a result of high demand and an intentional decision to limit inventory, now finds itself, quite literally, without pants as a the result of a manufacturing mistake.

The company issued a statement that its most popular black yoga pant made with Luon arrived in stores revealing too much of what was underneath. The pants, which arrived in stores on March 1, were pulled from shelves this past weekend. The recalled items represent 17 percent of the chain’s pants sales.

"The ingredients, weight and longevity qualities of the women’s black luon bottoms remain the same but the coverage does not, resulting in a level of sheerness in some of our women’s black luon bottoms that fall short of our very high standards," read a company statement.

According to The Wall Street Journal, Lululemon’s March 2012 Annual Report cautioned the company could be hurt by its reliance on a small number of suppliers to manufacture its goods.

What would you do if you were running Lululemon regarding the chain’s recent mishaps? Does the chain need to slow its growth trajectory?

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7 Comments on "Lululemon Gets Pantsed"


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Zel Bianco
Guest
9 years 2 months ago

Supply chain management is a difficult animal to control, however, this is a production issue that frankly should have been realized at the factory level. It sounds like Lululemon took a gamble on this questionable inventory and unfortunately, lost.

I would definitely re-evaluate my supply chain manager and production team to figure out how we are missing the mark, while simultaneously engaging new manufacturing sources that can handle the growing business. Being out of product is just not an option; poor quality product might be even worse.

Robert DiPietro
Guest
9 years 2 months ago

The WSJ mentions that the pants and fiber to make the pants were single sourced! That is not a good scenario for any company where a large chunk of sales come from one line item. The issue is sourcing and having more than one source for a major item.

Fix the buying and logistics for key items. You need more than one provider for key items whether it is milk or see-thru pants!

Stopping growth—now that is just crazy!

Camille P. Schuster, Ph.D.
Guest
9 years 2 months ago

First, Lululemon needs to explain that the probable results from a recall of inferior products sent directly to their consumers. Second, Lululemon needs to make an offer of a free top or accessory that will be sent with all orders that can not be filled. Theirs, that same offer, or one of a smaller monetary value could be made to the rest of their consumers saying the offer applies to anyone who places an order before the new pants are available. This will help keep sales going.

Lee Peterson
Guest
9 years 2 months ago

Regardless of the pants scenario, I’d encourage Lululemon to slow the big expansion machine down. The retail landscape is littered with concepts that started out just as hot, went crazy with the physical space spend, diluted the brand in the process, and are now in the process of cutting back (can you say Gap?).

Quality control issues are a part of going too fast for sure, but so are value engineered store materials, loss of control on new hires, poor product decisions and ultimately, a denigrated brand.

Some “slow growth” brands like Container Store, Whole Foods, In & Out, Crate & Barrel would be good studies for Lulu at this stage of the game. Everyone wants growth, until you hit the brand wall…then everyone either wants to criticize or bail. In any case, growth for growth’s sake is just not worth it.

Colleen Hannegan
Guest
Colleen Hannegan
9 years 2 months ago

If I was running Lululemon, I’d use humor and levity (same thing?) to lighten the seriousness of the whole mess. “Even Lulu gets a lemon now and then! Who needs pants? This month we’re really into skirts, shorts, capris, and tops.” I’d send an email announcement telling the truth, offer a great discount on another product that is available, ask for my customers understanding and use it to my marketing advantage. “A sheer mistake.” “We are sooooo sorry for the inconvenience.” We love our customers! Send a coupon, have a “without pants party weekend” turn it into a chance to be closer to your customers and then search new options for suppliers.

But as I learned from my 23 years running my own retail store, sometimes a big mistake, when handled with understanding not anger, smooths things out much faster.

Robert George
Guest
Robert George
9 years 2 months ago

As with any growth organization, the question becomes, are they making the appropriate investments in people, processes, and technology to support their continued growth? I would not slow down growth, but accelerate investments to manage growth.

Bill Hanifin
Guest
9 years 2 months ago

Maybe I misunderstand, but I’m not sure how one style of pants subject to the recall could represent 17% of total pant sales. It is obviously a very popular style. The Lululemon stores have lots of inventory with an entire section of pants, therefore maybe one issue is that they carry too many styles that don’t sell.

At any rate, it seems that an improvement in their overall merchandising and inventory management is warranted.

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