Lululemon Stock Dips After Sheer Yoga Pants Recall

 @ZoeMintzz.mintz@ibtimes.com
on March 20 2013 1:30 PM
Lululemon raises profit forecast, shares jump
Lululemon's stock drops after the company recalls its see-through yoga pants. Reuters

Lululemon’s recall on its batch of sheer yoga pants is costing the company in more ways than one.

Since Lululemon announced it would be pulling the see-through pants from stores, shares in the company have dropped more than 4 percent on Tuesday, Reuters reports. The company downgraded its sales predictions for the year, estimating first-quarter sales of $333 million to $343 million, instead of $350 million to $355 million.

Lululemon said it first heard of the problem on March 11, when “some of our store managers expressed concern over the sheerness of some of our women’s black luon bottoms.”

Over the weekend, the company removed the affected pants from its stores and website.

According to Lululemon, the pants represent approximately 17 percent of all the women’s pants available in stores, which could mean major shortages.  

"The potential problem you have is that if the customer walks in and can't find that pant, and she can't find it for six weeks, she might end up saying, 'Oh, well, I'll try Under Armour, or I'll try Nike, or I'll try whomever,'" Sterne Agee analyst Sam Poser told Reuters.

As the Atlantic’s Jordan Weissmann points out, Lululemon’s latest flub may be a sign of bigger problems for the trendy brand.

Back in June, the company was experiencing a slowdown which could be attributed to the company’s high prices, Slate reports.

The shortage on the popular pants may be ample opportunity for cheaper competitors to get converts. Lululemon may also be faced with convincing customers their products are worth the extra cost, the Atlantic reports.

A pair of the Gap yoga pants cost $16.95 compared to Lulu’s, which go for at least $98.

But there’s one group that doesn’t have a problem with the expensive sheer pants.

Statistics Canada recently tweeted, “85% of Canadian men are strongly opposed to the Lululemon recall.”

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