Say it ain’t so.
I’m afraid they already did.
I came across an alarming revelation on Lululemon in the New York Times this morning. Apparently, one of Lululemon’s clothing lines which uses seaweed as a natural fiber for additional health benefits (like stress reduction) was tested…the results came back negative:
The New York Times commissioned a laboratory test of a Lululemon shirt made of VitaSea, and reviewed a similar test performed at another lab, and both came to the same conclusion: there was no significant difference in mineral levels between the VitaSea fabric and cotton T-shirts.
In other words, the labs found no evidence of seaweed in the Lululemon clothing.
To Lululemon’s defense, they were relying on the supplier and their claims that the goods they were being sold did in fact include seaweed. Apparently the test results showed the VitaSea product was less than 25% seaweed.
Seaweed or not, I went over a bit of the background on Lululemon after it went public in the summer and talked about some of the great customer service experiences I (and others I know) have had, particularly here in Vancouver, its home market. I still think it’s a great product, but this latest story may cast a negative shadow over their marketing tactics and trust in the eyes of the consumer.
The Lululemon share price is taking quite the hit from today’s news (to the downside) so I imagine that their PR group will be quite busy dealing with this. What concerns me is that do these results warrant testing Lululemon’s other products which use natural fibers (like silver, soybeans, and bamboo) as well?
I have no idea. What I do know, though, is that I’ve bought some of their clothing which contains silver and have found that it does what it claims to do. But now I can’t help be a little sceptical. It seems as though there are others like Lee Distad and BloggingStocks who have also had a reaction to this news.
I suppose time, and maybe even more tests, will tell.
darren
Well, i think in the big picture this is just a bump on the road. The company is solid, the products are wonderful, and what better time to buy more stock. This story will be dead in two weeks, and no one will remember. The company will continue to perform and grow like gangbusters. Remember, 80% of their sales are coming from Canada - they are just expanding into other regions now - so the upside is huge! And down the line, they will end up being bought out by Nike or Adidas - because it will be cheaper to purchase the brand, the loyalty, than trying to create all that from scratch. I know of no other brand that has gone to the lengths that LULU has to get feedback from it’s frontline workers.
Short term investors always baffle me. Would you sell your house, and panic just because you have a leak in the roof. Or do you fix it, and hold on to it because your property is appreciating at 10% per year. Where are the big picture, long term investors? I guess they are just keeping quiet.
Does Warren Buffet panic or take the short term view? NO