Lululemon Athletica inc. (NASDAQ:LULU) suffered a public relations disaster earlier this year. It had to recall some black yoga pants that turned out to be sheer in the posterior -- exactly the area many Lululemon Athletica inc. (NASDAQ:LULU) fans claim the yoga retailers' pants improved.
Maybe some investors don't know too much about fashion, but it's easy to see why that might be a seriously bad scene for trust. It was also easily the butt of jokes, and I'm sure it wasn't amusing for anyone who actually bought the defective pants.
One set of shareholders has recently filed a class action lawsuit against the retailer, making particularly damning claims. They contend the company didn't disclose the defective pants, and that the disaster happened because management was trying to reduce costs and boost profit margins despite decreased quality -- a terrible business move. From a high-end yoga retailer, that move could leave lasting damage to the brand, and also implies the company was scrambling to raise its profitability.
Around the same time, longtime CEO Christine Day's resigned. CEO resignations can theoretically be good news for struggling companies in some cases, but in this one, Day had steered the company through quite a successful run.
Now, Lululemon Athletica inc. (NASDAQ:LULU)'s got a whole other PR issue to contend with. It's come to more widespread knowledge that the yoga retailer's merchandise selection doesn't stretch beyond size 12. In other words, it's targeting women of certain smaller sizes and leaving many others searching elsewhere for active clothing. It's probably also leaving many of those frustrated potential shoppers insulted, too.
A catty cult? I've had my moments in which I wasn't quite convinced that super-pricy yoga pants made sense (shouldn't sweats do the trick?). Obviously, though, given Lululemon Athletica inc. (NASDAQ:LULU)'s success, many women are willing to pay a pretty penny for yoga attire, particularly if it makes certain body parts look good.
True, companies have every right to choose a target demographic. Some stores cater only to plus-sized women. Some target teens, and some look to lure baby boomers. Still, there's a fine line between demographic aims and insulting misses.
Size is a sensitive subject these days. Everybody knows that slender and occasionally disturbingly skinny has defined "beautiful" for quite some time now, and many believe it's mean and unfair.
A company that equates "size" and "fitness" related to an activity meant to be healthy, fit, positive and therefore good for everyone is basically implying that some don't deserve to be part of the skinny-girl club, at least with Lululemon Athletica inc. (NASDAQ:LULU)'s cabal.
Sizing up the others So how are rivals handling yoga and fitness clothing? They're doing a better job than the cult-like Lululemon Athletica inc. (NASDAQ:LULU), as it turns out.
The Gap Inc. (NYSE:GPS)'s Athleta website lacks the cultish posturing, and its size chart illustrates that it has yoga and other fitness attire for sizes 0 through 20. In fact, its advice is practical: "We're dedicated to giving you a product that DOES MORE than just look good. Enhance your performance by choosing the right fit, fabric, and features so you can take your game to the next level."
Another rival, VF Corp (NYSE:VFC)'s Lucy activewear, includes sizes 00 through 18. Yet another, prAna, offers a narrower size chart, but its choices still reach size 16.