Sheer Pants Could Result in Lululemon's Downward Sales Plunge

The spotlight is on the yoga emporium Lululemon Athletica today as the news broke that many of its popular yoga pants were pulled off the shelves. Lululemon’s media statement on their website says the pants account for 17% of all women’s pants available and are too sheer for their standards... meaning you can see right through ‘em. Multiple styles of the black Luon pants were put on shelves March 1 and they’re one of the retailer’s top products.

Lululemon employees were hard at work over the weekend sifting through inventories to find all the pants from that bad batch. Meanwhile, the CEO was probably trying to cure a massive headache. The pants shortage means sales of about $20 million are lost for the first quarter. Not an easy pill to swallow... and that doesn’t begin to cover the loss in stocks.  Lululemon reported on their website that Luon is composed of “a combination of nylon and Lycra spandex fibres” and is manufactured in Vietnam and Taiwan. Tapping into the Import Genius database - which contains over 75 million records of U.S. ocean freight imports - shows that Lululemon has not received any shipments from Vietnam since November 1, 2012. The company had received only 10 shipments containing the term ‘pants’ since December 1, 2012. With this information, we were able to narrow down the possible suppliers to pinpoint a few that may be responsible for using the improper materials that resulted in super sheer pants.  Newser reported last quarter that Lululemon had admitted to only working with one Luon manufacturer.  A shipment exceeding 27,000 pounds was received on December 9 from China containing ‘ladies nylon and spandex woven pants’. This description sounds extremely similar to Lululemon’s definition of Luon fabric. The shipment was sent from logistics company ‘CHARTER LINK LTD,’ who also works with Aritzia, known for its women’s clothing. Charter Link Ltd. also shipped freight termed ‘girls nylon and spandex woven jacket’ and ‘girls nylon and spandex knitted pants’ to Ivavva Athletica Canada Inc on February 18. If these products were made with the same unsatisfactory material, even more retailers may face the same problem Lululemon is dealing with.  Lululemon also got a shipment of nearly 5,000 pounds from ‘FEEDER APPAREL CORPORATION’ received on February 11 containing ‘women’s woven pants without lining’. The country of origin recorded is China Taiwan. Feeder Apparel Co. also supplies to popular athletic companies Adidas, Under Armour and Saucony. It’s safe to assume one of these two shippers was involved in the mishap.  The damage may already be done for eager exercise enthusiasts who sported their new pants to the gym. But Lululemon is offering a refund or exchange to customers who want to ditch the self-exposing workout gear. This mistake won’t only affect Lululemon’s sales in addition to irking loyal customers, but it could also have negative implications for the supplier. Lululemon reported that quality control among manufacturers is the problem here. “We are working closely with our manufacturing partner to understand what happened during the period this specific fabric was made.” If other importers also working with Lululemon’s supplier become aware of the mistake, they might decide to pursue other manufacturers with a cleaner track record.