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
TheStreet Open House

3 Lessons Lululemon and American Apparel Need to Learn

NEW YORK (TheStreet) -- What can Lululemon (LULU) and American Apparel (APP) learn from Apple (AAPL)? A lot probably, given the first two companies' recent struggles.

The battles between the founders and the boards of both of these apparel companies are heating up and as performance generally suffers, each retailer is being distracted further.

Penny stock American Apparel made waves last week when it abruptly announced that it was terminating its founder and CEO Dov Charney, 45. Co-chairman Allan Mayer cited "an ongoing investigation into alleged misconduct" that forced the board to fire him. Media reports have said Charney had been embroiled with multiple sexual harassment lawsuits, all settled out of court, and had been accused of inappropriate behavior, including him walking around in his underwear at the office, among other things.

It's looking increasingly like Charney is not going down without a fight and considering that he owns 27% of the company's outstanding stock, the board is in for quite a headache. Charney, through his lawyer, has requested to meet with the board to demand his job back, but the board told Reuters that it sees no reason to meet with him. American Apparel announced on Monday that it had hired financial and strategic advisor Peter J. Solomon Company to represent it.

Lululemon's founder Dennis "Chip" Wilson is also apparently gearing up for a proxy fight as news surfaced that the former yoga apparel retailer's chairman was in discussions with Goldman Sachs (GS) to discuss ways to shake up its board of directors or perhaps take the company private. Wilson, who gave up his chairmanship late last year when the company hired its new CEO Laurent Potdevin, has been critical of Lululemon's current board. Wilson had released a statement prior to the Vancouver-based company's annual meeting this month in which said he voted against re-election of two outside directors -- Lululemon's chairman and a former Starbucks (SBUX) executive, Michael Casey, and private equity executive RoAnn Costin Wilson.

American Apparel Hires Adviser Following CEO Dov Charney's Termination

Here are 5 Retailers With Big Short Interest

American Apparel, Is It Fit for a Buyer?

Will Express Lead to Other Retailers Being Snapped Up?

Can Lululemon Regain its Shining Star Status?

TheStreet spoke with retail industry analysts and consultants to gleam some lessons from some of the more successful retailing companies, specifically Apple, Nike (NKE) and Ralph Lauren (RL), to extract lessons for both Lululemon and American Apparel. Here are three lessons:

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,055.87 -116.81 -0.68%
S&P 500 1,982.77 -11.52 -0.58%
NASDAQ 4,508.6880 -19.0010 -0.42%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs