Lululemon Athletica has now gotten more bad news for their company as an analyst has downgraded their stock to “sell.”
Sterne Agee analyst Sam Poser has changed the status of the Lululemon Athletica’s stock from “buy” to “underperform,” and this could not have come at a worst time for the yoga clothing company as they are in a downward spiral for their controversial remarks made by their founder a couple weeks ago. Now with the company looking for a new CEO, responding to comments about women, and having their stock downgraded, Lululemon Athletica is exhibiting more trouble than they probably imagined. The biggest question will now be: can they recover from this mess?
Anytime negative PR happens to a company, there is a definite backlash at first, but normally, a company will offer an apology and promise to fix any changes necessary to keep their customers happy immediately because they don’t want to lose any money. But, Lululemon Athletica did the opposite of that.
In March, there was the beginning of the company’s backlash when their new shipment of yoga pants appeared to be sheer to the point where a person could see someone’s backside. Lululemon Athletica then recalled their yoga pants and took them off of store shelves. But women then complained even more that the new pants were still see-through. News outlets picked it up even more, and it seemed that it was time for Lulelemon Athletica had to address the situation.
But, when Lululemon Athletica’s founder Chip Wilson addressed the situation in early November on television, he stated that the reason the yoga pants seems to be sheer was because that for some women’s bodies, it would not fit on them, it would appear too sheer, and they must be sitting on a hard surface and stretching the fabric out that way. That set off a major firestorm among their customers. Many were appalled that someone would even mention a person’s weight being the problem for their pants, more or less the founder of a company.
After that blowup, last Friday Wilson posted a YouTube video, apologizing for his words. Lululemon Athletica then introduced a new batch of yoga pants this week that have a side panel and claim that extra fabric on the bottom area would not be as see-through.
But, this correction may not be enough for the company to recover from. What the biggest problem is the time it took for the company to apologize for its remarks. Wilson didn’t immediately release a statement the same day that he said his remarks. Instead, he created a video, to make it seem like he was sincere about it. But the longer a company waits to respond, the more likely customers will walk away. Also, it gives Lululemon Athletica’s competition the chance to jump in and grab their customers.
If Lululemon Athletica can recover from their PR situation, their stocks may be able to climb back. Only time will tell.
By: Renayle Fink