Media interest in Lululemon’s yoga pant recall is priceless, says expert

Whether it’s a real crisis or a manufactured one, the exposure Lululemon is getting from this week’s yoga pants recall is priceless, according to a marketing expert.

On Monday the Vancouver-based yoga clothing icon attracted a flurry of international media interest — and bad puns — when it announced a recall of a recent shipment of pants and crop pants in its “signature Luon fabric” for being so sheer that they left little to the imagination.

“We believe the affected items represented approximately 17 per cent of all women’s bottoms in our stores and for the near term there will be a shortage of these styles available to our guests,” the company warned while offering no immediate explanation for the cause of the problem.

The suspect batch of pants, which was first offered for sale March 1, was removed from store shelves and the company’s Internet sales site after “some store managers expressed concern over the sheerness of some of our women’s black Luon bottoms.”

“We are working closely with our manufacturing partner to understand what happened during the period this specific fabric was made,” the company said in a statement.

It warned investors of a “significant impact” on its projected first-quarter sales revenue, saying it could fall as much as $22 million short of projections as a result of the recall.

Simon Fraser University marketing professor Lindsay Meredith said a recall that ties the company to revealing clothing would do nothing to hurt the Lululemon brand with its target market — women aged 18-35.

“My take is that you’ve got some pretty sophisticated spin doctors working the backroom,” Meredith said.

Get breaking National news

For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.

Sign up for breaking National newsletter Sign Up

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Young women’s contemporary fashions seem to be emphasizing skin tight materials and “fairly risqué” designs — and Lululemon “are very much in line with the current fashion, current trends,” he said.

“If their target market has moved into that direction of fashion, where tight is better and revealing is pretty good, then Lululemon are dead on the money here with the product,” Meredith said.

He added that he’d be less skeptical of the company’s motives if they’d simply pulled the product instead of issuing a lengthy statement about the recall — and attracting significant media coverage in the process.

“The average consumer is exposed to over 5,000 hits a day and in that clutter of course everybody gets disappeared. Then the issue is, among all the clutter, how do you get noticed?

“The way you get noticed is you turn the story into a news item. Did I mention you don’t pay any money for advertising, either?

“This would have had more veracity, if you will, more of that believability for media, if in fact an external watchdog had jumped in and said ‘OK, we’re forcing you to pull the stuff off the shelves.’ But that didn’t happen.”

Some retail sector analysts, meanwhile, portrayed the recall as part of a recent series of production flubs by the billion-dollar clothing empire that was founded in Vancouver in 1998.

The debacle marks the fourth quality problem in the last year for Lululemon, according to Credit Suisse analyst Christian Buss — and not the first see-through issue.

First, the Vancouver-based company had sheerness problems with certain swimsuits for spring 2012, Buss noted. And some light-coloured pants on sale carry this disclaimer: “You may experience sheerness with some of our bright-coloured bottoms because of the lightweight nature of the fabric. We recommend you do a couple of Down Dogs in your brightly coloured bottoms to ensure you’re happy with the fit and coverage.” The company also has had problems with bright dyes bleeding.

Faye Landes, an analyst at Cowen & Co., thinks it was customers, not store managers, who first suggested there was a problem.

“If this is indeed the case, we suspect a serious lapse in (the company’s) supply chain, quality control and vendor management and specifically in its quality assurance program,” she said.

Until now, Lululemon has been as much a star for investors as it has for yoga devotees. Its shares rocketed from less than $3 in 2009, to around $65 this year. Lululemon’s stock price dropped nearly three per cent in New York trading Tuesday to close at $64.08. The stock is down 16 per cent in the year to date while the broader U.S. markets have been hitting multi-year highs.

Analysts expect to get more details when Lululemon posts earnings for the final quarter and full fiscal year on Thursday. But already some Wall Street analysts have downgraded the stock.

Other marketing analysts dismissed the debacle as a temporary glitch and said Lululemon’s loyal customers won’t switch to rivals like Nike Inc. or Champion anytime soon.

“It’s a late-night TV joke, and it’s going to pass,” said Robert Passikoff, president of Brand Keys Inc., a New York customer research firm.