Tasha Lewis is a professor of fiber science and apparel design at Cornell University, where she teaches fashion product management and has been following the marketing decisions of clothing brand Lululemon in the wake of a massive recall and its efforts to recycle and rebrand one line of its popular yoga pants.
Lewis says:
“The financial impact of recalling the defective pants earlier was definitely something Lululemon would have to contend with (the loss of about $17 million plus a CEO). The company had been challenged by explosive growth and limited inventory to meet customer demand, so the pressure to expand combined with increased production demands likely led to a loss of quality control along the way. “Many times a recalled item, if it poses no health or safety risks, can be sold through an off-price channel – an outlet store, for example. However, due to Lululemon’s positioning as a lifestyle brand in general, having its items in the off price market is not consistent with the brand image. Lululemon works hard to maintain a ‘scarcity model’ for its products, so upcycling the recalled pants is a rather smart move from a brand standpoint and a way to gain back some of the lost revenue.
“Lululemon has also featured a ‘we made too much’ section on their website for quite some time – this is where they own up to the fact that some items just do not sell well and are discounted. So the second chance pants are consistent with this sort of humble admission by the company that they have failed with a product. In this case it just happened to be their best-selling, core item and therefore a much bigger miss. “Unfortunately the second chance products are on the market at the same time as recent controversial comments by Lululemon’s founder, Chip Wilson. Wilson suggested that certain women’s body types are not suitable for the pants. This could alienate some customers, which may bode well for competitors of Lululemon, particularly in the United States. Gap’s Athleta brand is probably the biggest threat in this regard. Athleta offers more sizes, including some plus sizes, and has strategically placed their store locations in close proximity to Lululemon’s stores.”
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