Lululemon Turns a New Page with Wilson Out of the Captain’s Chair

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Despite a firestorm of criticism over a product recall, management shake-ups, and inappropriate comments from its eccentric founder, upscale athletic fashion retailer Lululemon Athletica recently reported increased profits and revenue in the third quarter. 

The Vancouver-based company most known for its yoga apparel said profits rose 15 percent to $66.1 million, or 45 cents per share, for the three-month period ending Nov. 3. Revenues climbed to $379.9 million from $316.5 million for the quarter, beating expectations of $374.6 million. But the company’s recovery may come to a halt next quarter, with projections for same-store sales coming in flat—collateral from a year of struggle for the company. 

Perhaps a holiday blessing for Lululemon will be the pending departure of outspoken, controversial founder Dennis J. Wilson, known as Chip, who will be stepping down as chairman of the board, though he’ll remain a member.

Wilson most recently ignited a firestorm after telling Bloomberg TV in November that “some women’s bodies just actually don’t work,” for the company’s famed yoga pants, the focus of a March recall that shed a spotlight on the company’s flawed supply chain and quality control issues. Wilson’s comments irritated an already inflamed sentiment that the company neglected plus-size women—an issue that it has yet to address.[more]

“We view Wilson’s departure as chairman as a positive,” Faye Landes, analyst at Cowen and Company, told the New York Times, “because he is obviously considered something of a loose cannon.” 

Michael Casey, lead director, will become chairman and Laurent Potdevin, most recently president of TOMS Shoes, will take over as CEO from Christine Day, who announced her resignation in June.

The cult-like company was a leader in the market, but ongoing gaffes from Wilson, poor customer service response to the Luon yoga pants debacle and a sharp increase in competition in the $14 billion plus-size apparel industry from Gap’s Athleta, Forever 21, H&M and Old Navy, who have brought fashionable workout wear to the masses, have hoisted Lululemon on its own petard. 

The Luon product issue is not Lululemon’s first. In 2007, when the company went public, it produced and sold a fabric called VitaSea, allegedly made with seaweed carrying a product label that read: “Releases marine amino acids, minerals and vitamins into the skin upon contact with moisture.” The New York Times commissioned a laboratory test and found the products were made of cotton with no trace of seaweed. “If you actually put it on and wear it, it is different from cotton,” Wilson said when told the results. “That’s my only test of it.”

Casey said Wilson will continue the company mission against “mediocrity,” which, unfortunately for the rest of us, means the world is sure to here more “wisdom” from Wilson. 

Here’s hoping that collective ambition is over.

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