This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Lululemon Acts When the Founder Becomes a Liability

NEW YORK (TheStreet) -- In retailing, image is everything.

Defining your image then protecting that image is job one for any retailing chief executive. When a CEO's image runs counter to the brand's message, it's time for a realignment.

The short version for what Lululemon Athletica (LULU - Get Report) has said in hiring a new CEO and announcing founder Dennis "Chip" Wilson will be leaving the company next year, is: Don't ANF me, bro!

ANF, in this case, is Abercrombie & Fitch (ANF), which this week doubled down on CEO Mike Jeffries despite a series of gaffes seen as insulting to the store's less-hot customers.

Lululemon's image is not like that of Abercrombie & Fitch. If Abercrombie's image is of someone who is too cool for school, a young Paris Hilton or Kim Kardashian, then Lululemon is a serene, together grown-up, more like Diane Lane or even Helen Mirren.

Lululemon makes yoga wear. It rose to prominence as aging baby boomers started to find high-impact exercise too stressful for aging joints and decided a calmer, internally focused workout might be the thing to make our golden years more golden.

Wilson rode that zeitgeist with clothes that yoga followers, and those who wanted to be seen as yoga followers, liked. They hugged the body, they stretched, they were useful as well as comfortable and they could even be worn outside the gym or yoga studio.

Wilson extended the line, making Lululemon a "yoga-inspired athletic apparel company," moving into running gear, fashion and lifestyle products, sold through branded stores, from the company's base in Vancouver.

The trouble began with quality control problems, things like bleeding dyes, fabrics that were too bright and, finally, a recall of some yoga pants in March for being too sheer.

Lululemon had always kept its inventory as tight as its clothes, in order to sell them at full price. The quality control problems backed up into the stores, costing sales.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
LULU $65.55 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs