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Chip Wilson made a fool of himself one too many times. And that’s why he was forced to resign as chairman of the company he founded.
Wilson founded Lululemon (Nasdaq: LULU), the popular and yoga-centric retailer, in 1998. The company went public in 2007, and the stock quintupled in its first five years of existence. But this year it hit a roadblock fueled by a series of embarrassing moments, many of which centered around the man who founded the company.
Here’s a timeline (and a chart) of Lululemon’s 2013 missteps:
-First, in March, Lululemon had to recall a line of its black Luon yoga pants because they were see-through in some very familiar places. Shares tumbled 11.5% in the week that followed the recall announcement. The screw-up cost the company an estimated $67 million.
-The stock dipped even further in June when CEO Christine Day stepped down. The stock tumbled 17% in one day and 25% over the course of the ensuing two weeks.
-Then, last month, Chip Wilson infamously said the following when asked about what happened with the pants recall debacle: “Quite frankly, some women’s bodies just don’t work for it. … It’s more about the rubbing through the thighs, how much pressure there is over a period of time, how much they use it.” He said that on Bloomberg TV, no less.
It wasn’t the first time Wilson had stuck his foot in his mouth. In a 2004 interview with National Post Business Magazine, Wilson said he purposely named Lululemon with a lot of ‘Ls’ because it’s “funny to watch (Japanese people) try to say it.”
He also once blogged that breast cancer “came into prominence in the 1990s” due to all the “cigarette-smoking Power Women who were on the pill and taking on the stress previously left to men in the working world.”
Needless to say, Chip Wilson’s comments – namely his recent ones essentially blaming larger women for the pants recall rather than faulty technology – outraged a lot of people. So it was time for him to go. The question now becomes: how much damage has Wilson done to the Lululemon brand? How many customers has the company alienated over the past nine months?
That could be difficult to measure – at least in the short term. What we can measure is how Lululemon’s litany of public blunders and resignations has impacted the stock. LULU shares have fallen 6.3% in a year in which the index on which it’s listed (the Nasdaq) is up 34%. That’s a pretty good indication that the company’s gaffes have taken their toll.
With Chip Wilson out of the picture, the company could well be positioned for a nice rebound in 2014.
But 2013 has been a year most Lululemon execs would soon like to forget.
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