Lululemon is a premier retailer of yoga-inspired athletic apparel that produces a clothing line based out of Vancouver, British Columbia, Canada. Founded in 1998 by Chip Wilson, Lululemon is focused on delivering high-quality products to its customers while creating sustainable solutions to its manufacturing and sourcing processes. They have built a large base of consumers that are willing to pay above average prices because of the product quality and brand image. Unfortunately, the firm has been a magnet for numerous controversies, mostly stemming from comments and decisions from founder and former CEO, Chip Wilson. Our analysis will first cover how Lululemon has handled various ethical issues that have resulted in multiple declines of their
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The pants made up almost 17 percent of all women’s bottoms sold by the chain and they suffered a loss of over $67 million. The setback turned from just a financial issue to yet another ethical issue when founder Wilson once again opened his mouth for comment. In a response to the recalled pants, Wilson stated on live television that “some women’s bodies just don’t actually work” for Lululemon’s yoga pants. “It’s really about the rubbing through the thighs, how much pressure is there.” Just a few days after, Wilson released a video apology to his employees for having to face the brunt of his actions. For many customers, it was an insufficient apology that failed to address all of the women he offended. The company, once again, was in risk of losing current and future customers because of the added controversy. In Chapter 3, we addressed investor confidence and the importance that shareholders and other investors have assurance that their money is in the care of capable and trustworthy organizations (pg. 93). The behavior of Wilson is certainly not instilling any confidence with these investors as they watch him continually make inappropriate comments after the company just lost nearly a third of its market value. The organization handled this situation by forcing Wilson to step down as the head of its Board of Directors, and he was told by the company’s executives that it was his fiduciary duty to refrain from further public statements. In a desperate attempt to reduce the massive decline in sales from the recall, Lululemon was in the media again after employees were asking customers to “bend-over” to prove if the yoga pants were too sheer for that specific individual. Opportunity was addressed in Chapter 8 and was described as a set of conditions that limits barriers (pg.
The pants made up almost 17 percent of all women’s bottoms sold by the chain and they suffered a loss of over $67 million. The setback turned from just a financial issue to yet another ethical issue when founder Wilson once again opened his mouth for comment. In a response to the recalled pants, Wilson stated on live television that “some women’s bodies just don’t actually work” for Lululemon’s yoga pants. “It’s really about the rubbing through the thighs, how much pressure is there.” Just a few days after, Wilson released a video apology to his employees for having to face the brunt of his actions. For many customers, it was an insufficient apology that failed to address all of the women he offended. The company, once again, was in risk of losing current and future customers because of the added controversy. In Chapter 3, we addressed investor confidence and the importance that shareholders and other investors have assurance that their money is in the care of capable and trustworthy organizations (pg. 93). The behavior of Wilson is certainly not instilling any confidence with these investors as they watch him continually make inappropriate comments after the company just lost nearly a third of its market value. The organization handled this situation by forcing Wilson to step down as the head of its Board of Directors, and he was told by the company’s executives that it was his fiduciary duty to refrain from further public statements. In a desperate attempt to reduce the massive decline in sales from the recall, Lululemon was in the media again after employees were asking customers to “bend-over” to prove if the yoga pants were too sheer for that specific individual. Opportunity was addressed in Chapter 8 and was described as a set of conditions that limits barriers (pg.