On the same day President Obama was preparing for his first trip to Israel, the finances of Cyprus called into question the future of the euro, and we marked the 10th anniversary of the Iraq War, the world was riveted by — of all things — yoga pants. Make that sheer yoga pants.
The news that Lululemon, the maker of pricey yoga gear, was recalling 17 percent of its pants inventory due to fabric that was too revealing spread widely on the Internet. It helped, of course, that the story was tailor-made for puns. “Yoga-Pants Supplier Says Lululemon Stretches the Truth,” quipped one WSJ headline. “The company’s profits are going downward, dog,” poked a Los Angeles Times columnist.
Or at least its sales may: The Canadian company lowered expectations Tuesday as a result of the recall, projecting a 5 to 8 percent comparable same-store sales increase, rather than the 11 percent previously expected. The company’s shares fell in trading Tuesday, finishing the day down 2.8 percent. Call it the yoga pants panic: “America Descends Into Lawless Pandemonium as Lululemon Threatens ‘Shortage’ of Black Yoga Pants,” snarked Gawker.
But even if the yoga pants story sounds like it was ripped from the Onion, there is a lesson in it for leaders. I doubt there’d be nearly as much fascination with the story if we were talking about athletic gear made by Champion. What’s driving the buzz is the idea that the company’s yoga-crazed fans were paying upwards of $90 for a pair of stretch pants that still didn’t cover their you-know-whats.
Every company risks suffering from quality-control issues and errors in their supply chain. But when a brand has a following as obsessed as Lululemon’s, the fall off its pedestal is that much farther. When JetBlue, known for its friendly customer service, got ensnared in an ice storm in 2007 that left thousands of customers stranded, it received far more attention than, say, United or American would have in similar circumstances. Same went for IKEA’s beloved meatballs amid the European horsemeat scandal. Consumers aren’t the only ones fascinated by these cult brands — the media is, too.
The attention is even greater if one of the very things that prompted customers to flock to the brand — quality, in Lululemon’s case — is what’s suddenly taken a hit. Analysts report that the yoga pants recall is the fourth quality issue Lululemon has faced in the last year, and not the first involving see-through fabric. Some swimwear had a sheerness problem last year, Credit Suisse analyst Christian Buss told the Associated Press, and the company has had issues with fabric dyes bleeding.
Lululemon’s CEO, Christine Day, hails from Starbucks, so should know a thing or two about managing a cult brand. PR experts recommend she re-launch the line of yoga pants and offer lots of perks for existing customers. Maybe there’s enough goodwill built up with customers that few will jump ship. But if she wants to maintain the company’s loyal following, and premium pricing, another problem like this could leave the company with a lasting (ahem) bum rap.