*from www.bloomberg.com, April 4, 2013 (To view original article click here.)
Take Away #1: Lululemon Atheletica Inc. (LULU), the yoga-wear maker that last month recalled shipments of women’s pants for being too sheer, said Chief Product Officer Sheree Waterson is stepping down.
Key Facts and Figures:
- Waterson, who had been with the company since 2008, will leave on April 15, the Vancouver-based company said yesterday in a statement.
- The company said in a separate release that it was restructuring its internal product organization.
Take Away #2: Lululemon has been probing how the shipments of pants that didn’t meet its standards passed through its testing procedures.
Key Facts and Figures:
- The recalled pants became too sheer when wears bent over.
- The black Luon pants accounted for about 17% of all the women’s pants it sells.
- The recall caused the company to forecast profit this year that was less than analysts estimated, sending shares to the biggest drop in two months.
- The company said that while the fabric, a combination of nylon and Lycra spandex fibers, met the low end of its standards, the company’s testing protocols were incomplete.
- Lululemon said it also was assessing all of its Luon garments that are in production and stationing company employees in factories to monitor manufacturing.
Take Away #3: The company reiterated the March 21 profit forecast that it gave when it announced the pants would be removed from shelves.
Key Facts and Figures:
- Lululemon rose 1.2% to $65 at 9:40 a.m. in New York.
- The shares had dropped 16% this year through the close of regular trading yesterday.
- The S&P 500 gained 8.9% for the year.
Take Away #4: The pants recall has been a challenge for the retailer, which has been able to sell $98 yoga pants and $64 tank tops because of its carefully cultivated reputation for quality.
Key Facts and Figures:
- Lululemon is offering full refunds or exchanges to customers who bought the defective pants after March 1.
- The company also faced problems with bleeding garments last year, which it apologized for through a letter on its Facebook page in July.
- Luon is manufactured in Vietnam and Taiwan, according to the company’s website.
- Lululemon, with more than 200 locations, has been expanding into men’s and girls’ active-wear and opening more stores internationally.
*To view original article from www.bloomberg.com click here.