Wednesday, December 11, 2013

Lululemon’s Problem with Flabby Thighs and Corporate Flubs

Our house is infested with reusable 30% post-consumer fiber Lululemon tote bags that say shit like: “breathe deeply and appreciate the moment” and “do one thing a day that scares you” and “the pursuit of happiness is the source of all unhappiness” and “dance, sing, floss and travel” and – most aptly stated as relating to this post – “life is full of setbacks.”  (For the record, I refuse to leave the house with one of these; my wife found me a bag that says “my reusable tote bag makes me better than you,” which I prefer because it gets right to the point). 

Lululemon is not a Buddhist monastery.  It’s a publicly traded company with stores in high end malls that sells exorbitantly priced yoga wear, mostly to women.  They came up with the truly genius idea of replacing their regular shopping bags with reusable ones, which, like swallowed gum, take 7 years to degrade and disappear.  The result is that, if you travel in any area with a critical mass of professional women with gym memberships, you cannot escape the bags.  They are everywhere. 

I have a Lululemon shirt, and it’s pretty nice.  The quality is one small notch higher than a similar shirt you could find at any sporting goods store for 25% of the price. What you’re paying for when you buy Lululemon stuff – the difference between the $2.75 production cost of a pair of yoga pants and the $95.00 purchase price – is image.  That image produced $1.3 billion in revenue in fiscal 2013.  And so, of course, it is an image that is very very carefully managed. 

But alas, there was a problem with some Lululemon yoga pants pilling and wearing thin in the thigh-rubbing-together region and the founder, CEO, chair of the board and owner of 29% of the company’s stock, Chip Wilson, had to go and say that the problem was not in the construction of the pants, but rather that “some women’s bodies just actually don’t work” with the pants.  Oops.

This raised a bit of a PR problem for Lululemon because rubbing thighs is something that happens with pretty much all women who (a) actually move their legs while wearing yoga pants and (b) weigh more than 85 pounds.  In other words, per a public statement that went immediately viral, the entirety of Lululemon’s client base, other than Gisele and several pre-pubescent girls, is too blubbery-in-the-groin for its pants.   

I wonder who the head of corporate communications is who got the call in the middle of the night that the top dog of the company had just gotten on TV and told pretty much all women that they are too fat to wear Lululemon pants.  Some turds  just can’t be polished.  There are some utterances that even the most talented spin doctors on earth cannot work with.  Facebook and the blogosphere erupted.  A trial was held on Morning Joe.  The fit women of these United States made their voices heard.  Chip Wilson had to go.  And so he did.  He made the TV rounds and offered and almost comically grudging apology.  The company condemned him forcefully and made it clear that chaffed thighs are noble and beautiful and at the very core of Lululemon’s most deeply held values.

Chip Wilson was stripped of all of his titles.  And a sigh of relief was expressed by the nation’s high-earning yoga devotees now that they could recommence shopping at Lululemon with a clear conscience.  But the purge was not complete, and the end of the boycott not entirely justified.  Chip Wilson retained one title – that of 29% shareholder.  That’s not something a board can take away.  And so whatever replacements have been brought in and corporate communications issued, the fact remains that 29% of all value and goodwill created by Lululemon’s pant sales and Eastern philosophy slogans belongs to a guy who has not a modicum of respect for the clients that patronize his company. 

It’s hard to shop based on politics and beliefs.  Domino’s is anti-abortion.  Chick-fil-A doesn’t like gays.  Hobby Lobby won’t carry Hanukkah stuff.  And Lululemon thinks your thighs are too fat to make its pants last.  What’s a consumer to do?  Choose your battles, I guess.  Write a scathing comment on Facebook.  Vote with your feet.  At a minimum, remember that a corporate image is just an image.  Candid words are deeper than PR.  And you really are just a number – a nicely toned, spiritually calm athlete with a credit card.   


Unknown said...
This comment has been removed by the author.
K Dillman said...

First, I must cheer your disdain for the ironic Lemon SHOPPING bags plastered with Buddhism-lite sentiments. Second, hurray for voting with your feet and dollars (and thighs). But, wow, it starts to get tricky as these capitalists are on to us. 'Green marketing' and my recent frustration - cruelty free health/beauty products. Try to find and decipher which companies are in fact not using animal products or products tested on animals! So many symbols shaped like bunnies, and caveats. It can be funny to ask folks at Sephora or, heck, to read the side of higher end products. And don't get me going about my gnawing question of whether cruelty-free and, likely, petroleum- based 'leather' is better/worse than recycled leather. It is a wonder I buy anything at all...but I do.....Thanks, Dan!

Unknown said...

Great post, Dan. Am not sure though this as a political issue. More of a bozo and brand issue.

The ex-CEO said something truly dumb and denigrating. And he was fired for it. But possibly this thought (that women's bodies are to blame) wasn't a culturally-shared belief in the C-suite at Lululemon. If it is then yes, your call to action to your readers, to align their politics with their shopping is rational. However, am not sure there's evidence of this.

Chip was obviously very powerful in the firm. He was the CEO, Chairman, Founder, and majority shareholder. He probably hand picked the board. This means there had to have been an overwhelming majority of board members, and C-Suite members, who turned on him and orchestrated his ousting.

No one at Chk-a-fil gets fired for their anti-gay remarks. Or at Dominos for anti-abortion sentiments.

This event (on top of the see through pant issue at the beginning of the year) has been terribly damaging to the firm. As you point out, the image or brand of the firm is THE business. The brand is why they can charge $95 for a $3 item.

A brand isn't owned by a company. It's a set of perceptions and associations in the minds of the consumer. The Lululemon perception has shifted from the feeling of Karmic goodwill to one of women-baiting. This hit to the brand is potentially company destroying.

There's a great mind exercise to illustrate the economic value and the underlying power of branding. Imagine that overnight all of the materials that go into making coke disappear. All the aluminium, glass, trucks, vending machines, bottlers etc vanish. The question is would investors pay what would be billions of dollars to recreate all this hardware and means of production. The answer is yes. The return on that investment over time would be significant. Now, imagine that overnight our collective memory and all our associations with coke disappear. You wake up in the morning and there's this odd, red can in the fridge and you have no idea what it is. Now, would investors pay to restart the company? The answer is no. You couldn't spend the billions and billions it would take to recreate the deeply felt product associations built up over generations... and still expect a return on that investment.

So. Lululemon is kind of fucked. All around the world right now there's conversations at gyms and coffee shops between women who buy a lot of Lululemon stuff. These conversations are echoing the sentiment of your blog. These conversations are reshaping the perception about the Lululemon brand. These conversations aren't about the CEO, though. They are about a loss of trust with the brand. They are about the feeling of loss that comes when a good friend stabs you in the back. It's personal. It's way bigger than Chip.

My guess is that Lululemon had a growth plan that involved extending the brand from a niche yoga-infused athletics company to a lifestyle brand that's relevant for many needs. My guess is that this growth is now off the table. Done. Gone up in smoke. The company will survive, but diminish. Gone is the momentum that could have seen this company grow into a 21st century Nike.

TeeDubs said...

Yes, Chip's comment was not proper.

That being said, some companies cater to different sized bodies. In fact, many companies make specific clothing lines for different body shapes. Brooks Bros for example has four shirt types: Traditional, Regular, Slim and Extra Slim. Some companies specialize in a particular body type--for example, it is going to be tough for an overweight male to squeeze into most of what Hugo Boss makes.

With that line of thought, I don't think it is unreasonable for Hugo Boss to say that they don't make clothes for people who are thicker around the middle (although they should probably not say this from a PR standpoint).

When I go to City Sports, some of their brands fit me well, some are baggy and some are tight. Lululemon items fit me just right. I suspect their men's yoga pants would not fit someone much larger or smaller than me...around the waist with a similar height that is.

Chip should not have blamed a possible clothing defect on womens body types, nor should this comment have been focused on thighs touching. However, the reality stands that Lululemon does not make clothes for all body sizes.