Lululemon Athletica Inc. (Nasdaq:LULU) said Monday that CEO Christine Day is stepping down in the wake of a public-relations nightmare in March that cost the company tens of millions of dollars in revenue. At that time, the Vancouver-based apparel retailer recalled 17 percent of its popular stretchy black yoga pants after store managers complained that the item was so thin as to be practically transparent.
After the announcement, Lululemon's shares fell nearly 13 percent to $71.88 in after-hours trading. Since the March incident when the stock tumbled to as low as 62, shares had clawed back to over 80 in the past few days.
Lululemon stated that Day, who has led the sportswear company for more than five years, will officially leave the retailer once it finds a suitable replacement. Day said during a conference call Monday that her departure was a "personal decision," about which she notified the company's board on Friday, USA Today reported.
"Plans have been laid for the next five years and a vision set for the next 10," Day said. "Now is the right time to bring in a CEO who will drive the next phase of Lululemon's development and growth. I will continue to actively lead the organization while the board searches for a new CEO, and will work to ensure a smooth transition."
When Lululemon announced the recall of the pants made with the virtually see-through fabric dubbed Luon, the company estimated a revenue shortfall of between $12 million to $17 million in the first quarter and $45 million to $50 million over the remainder of the year. Chief Product Officer Sheree Waterson stepped down a month after the recall.
Day worked as an executive at Starbucks for 20 years before joining Lululemon and becoming its CEO in 2008.