BUSINESS

A look at recent struggles for yoga retailer Lululemon as its popularity soared

06/11/2013 04:04 EDT | Updated 08/11/2013 05:12 EDT
Yoga-wear retailer Lululemon Athletica Inc. (TSX:LLL) has grown by leaps and bounds since its first store opened in Vancouver in 1998, but the company has hit several quality control snags as it struggles to keep shelves stocked.

Meanwhile, skyrocketing demand for Lululemon clothing in the past five years has produce quarterly earnings that consistently impress investors, but has also left some customers empty-handed.

Sept. 28, 2011 — RCMP issues a warning against buying counterfeit products after about 100 fake Lululemon items were seized at a house party in Point Edward, Ont.

Dec. 1, 2011 — Lululemon's third-quarter profits rise 51 per cent to US$38.8 million and sales jump 31 per cent as CEO Christine Day says "unmet sales demand" was a challenge for its stores.

Jan. 6, 2012 — Founder Chip Wilson announces he will resign as chief innovation and branding officer near the end of the month, but remain as chairman.

March 22, 2012 — A slate of new products could pressure profits in the first quarter and beyond, Day warns investors, saying the company planned to lower margins and not shuffle the costs down to consumers.

June 7, 2012 — Lululemon says after a product shortage the previous year, it now has notably more yoga wear than it can sell, with the value of its inventory rising 67 per cent.

March 18, 2013 — Lululemon pulls its hip-hugging black Luon pants from store shelves due to a problem with the sheerness of the material. The recall represents about 17 per cent of its women's bottoms products, and the shortage cuts into sales.

March 21, 2013 — The company says it expects to lose between US$12 million and $17 million of revenue in the first quarter because of the recall and that earnings would be reduced by 11 to 12 cents per share.

April 3, 2013 — Chief product officer Sheree Waterson, who joined the company in 2008 and oversaw quality management, exits the company though specific reasons for her exit weren't disclosed.

May 3, 2013 — A U.S. pension fund representing police officers and firefighters in Hallendale Beach, Fla., launches a lawsuit against Lululemon over its decision to increase potential bonuses for executives prior to announcing its Luon pants recall.

June 10, 2013 — Day announces plans to leave the company as the board launches a search for a new leader. The company also announces it plans to delist from the Toronto Stock Exchange.