Lululemon Athletica Inc., a self-described yoga-inspired athletic apparel company, was till now unaffected by the falling consumer confidence and competition from online fashion brands, but it seems, the Vancouver, British Columbia based company has been stung by the retail gloom and some bad PR.
After reporting better than expected third quarter results, Lululemon dimmed its outlook for the next quarter and fiscal 2014 due to the supply chain issues, overall weak traffic trends and the projection of weaker Canadian dollar. It said that the all-important Q4 is estimated to be ho-hum after years of double-digit growth it had posted.
With the retail space getting competitive every day, Lululemon has begun to feel the heat with lower traffic at its stores. Lululemon is finding it difficult to convince its customers to buy its high-priced athletic wear when competitors are offering cheaper options.
On the other hand, the quality of its products, off-late, has also disappointed many customers, leading to the departure of its CEO Christine Day who was blamed for the inferiority of company’s core product, a black Luon yoga pants. She will be replaced by Laurent Potdevin, former president of TOMS Shoes.
Lululemon has also announced Michael Casey as the replacement for its chairman Chip Wilson, who holds roughly a nine per cent stake in the company, just weeks after his controversial comments on the Luon yoga pants.
To recover from the setbacks and to keep tabs on consumer response, Lululemon has started conducting brand perception surveys. The company has also replaced its existing suppliers and intensified quality controls.
Founded 1998 by Dennis "Chip" Wilson, the first Lululemon retail store was opened in Kitsilano, a Vancouver neighborhood. Today, Lululemon operates approximately 201 stores, with the majority in North America.