Lululemon CEO Christine Day Stepping Down as Brand Continues Recovery from Pants Incident

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Lululemon CEO Christine Day, at the helm since 2008, is stepping down, sending the beleaguered brand’s stock into a 14 percent plunge while the retailer continues to recover from a costly manufacturing hiccup that resulted in the recall of its top-selling yoga pants

“This was a personal decision of mine,” Day told the Wall Street Journal. “It’s never a perfect time to leave a company you love.” She also plans to step down from the board, citing exhaustion from the long work days and not wanting to begin a demanding travel schedule as the brand expands internationally. “We’ll probably hear talk that she was asked to step aside given the big black eye of the see-through pants incident, but she’s not leaving today,” retail analyst Brian Sozzi, CEO of Belus Capital Advisors told Forbes. “There wasn’t a lot of animosity.”[more] 

The popular Day, who immersed herself in the company’s unique culture had quite a successful run as CEO as founder Chip Wilson slowly handed the full gamut of the company’s operations over to her. A veteran of Starbucks, Day multiplied Lululemon’s annual revenue to $1.37 billion while bringing profits up nearly nine times to $271 million.

However, her golden reputation couldn’t save the brand from the onslaught of negative press when it revealed in March that the brand’s staple product, its black luon yoga pants, were in fact see-through, resulting in plenty of consumer ire. In a textbook example of how not to handle a product crisis, Lululemon remained relatively mum on the recall, in turn creating an environment of confusion for consumers looking to return their faulty purchases.

The supply chain issue wasn’t the first, as the brand had suffered a dye and fabric problem prior. In the coming weeks, Lululemon saw the departure of its Chief Product Officer Sheree Waterson as it tried to place blame intitially on its Taiwanese supplier, though it eventually took a good deal of responsibility for the mishap, noting that the products had met the company’s standards at the lowest level. 

Despite what seemed to be a catastrophic blow to the brand’s core product offering and cult-like community, Lululemon’s stock has risen 25 percent since the March 18 recall, even citing some ticked-up “curiosity traffic” at the height of the pants problem. Earlier this month, the brand announced that the pulled products would be returning to store shelves and online throughout June, touting that it now puts its pants through 15 different quality tests and ensuring consumers that there is now “more fabric across the bum.” 

That’s all well and good, but analysts fear that replacing Day will be a bigger task than one might expect. Her deep integration into the brand’s culture is a cause for concern, as a general CEO-type may find the company’s ways a bit jarring. “The stock is horrifically overvalued,” Sozzi told Forbes. “This is absolutely 110 percent CEO-related, and a new CEO could mess it up. We have a potential hiccup in the company ‘story’. They have a proven commodity in Day. What if they get some middle-aged man? This is a big risk to customer loyalty.” 

Still reeling from the company’s product mishaps, not everyone is upset by Day’s departure. “Day has ruined everything special about lululemon,” writes blogger Carolyn Beauchesne, a.k.a. the ‘Lululemon Addict.’ “She is a one-trick pony who grew the company through expansion.”

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