Sheer insanity. Lululemon-gate. Too much asana. Call it what you will

Sigh. I feel like we have to have this one on the record here. A link on Facebook just wasn’t enough.

Lululemon has had to pull its super popular Luon black yoga pants because they are too darned revealing. Yeah, all those high school principals everywhere were on to something!

No, it’s actually a little more specific than that. It’s a recent run of the pants that’s the issue, about 17% of stock. Apparently due to “quality control” issues, there isn’t enough material to cover your “sitting bones,” as the backside is so delicately referred to in yoga rooms.

The reason I feel compelled to have it on the record is not because I think it is a super significant story, although Lululemon’s stock did drop as much as 5% on the news and the company is saying that there will be a shortage of the pants for a while. It’s because everyone else does. Here’s just a few of the stories:

The company is in full-on crisis mode. From its webpage (and for those who need to know more, its media release is here):

At the beginning of March, our stores and ecommerce site received some black luonwomen’s bottoms that didn’t meet our high standards. The materials used in construction were the same but the coverage was not, resulting in increased sheerness. We want you to Down Dog and Crow with confidence and we felt these pants didn’t measure up.

We keenly listen to your feedback and it is paramount to us that you know we’re listening. We are 100% committed to doing the right thing for our guests and living our standards. It is with these intentions in mind that we’ve pulled the affected product from our floors and website.

[snip]

We are committed to making things right so if you purchased product from our store or on our website and you think it is too sheer, we welcome you to return it for a full refund or exchange. If you have any questions please click here for more information, visit any of our stores or contact our Guest Education Centre at 1.877.263.9300.

Full refunds? That’s, what, like $550? I can only imagine what John Galt might think.

Update: You’ve seen it, but let’s keep everything in a neat package. Jimmy Kimmel’s PSA:

Posted by Steve

Just chillin’ in Encinitas, nothing’s getting me down

Bobbie and I are both down in Encinitas; she’s about four hours into her first day with Tim Miller at his Second Series teacher training. I’ve spent three hours in the car getting down here; some time grabbing lunch in downtown Encinitas; about 30 minutes forgetting various accouterment needed for the beach (first a towel, then my hat, etc.), finally got to the beach for a few hours, got in a couple of swims, then skateboarded by the Encinitas Self Realization Fellowship to see what the surf was like at Swami’s.

And tonight there’s a welcome dinner at Tim’s.

Why do I tell you this? Well, obviously to make you jealous. It’s about as warm as it gets by the beach in Southern California — easily 80 — and just about the perfect SoCal day.

No, I kid. It’s because I am relaxed and thus as I just sit here, almost able to see the ocean from the couch, I’m extremely chill when I read a few mainstream media stories on yoga, which all offer a fairly dramatic counterpoint to each other.

Normally, I’d feel that wee bit of frustration I get over the ill-painting of yoga. (Yeah, I know, I need to work on that.) But today… it’s all good.

One’s in the Los Angeles Times, about the burgeoning Wanderlust festival. Then there’s a piece by Reuters on Lululemon’s suing Gap and Calvin Klein. The other, in the Globe and Mail, is about yoga activism or politicization.

I think I’m on the record as being somewhat hesitant about, as the Globe piece titles it, “how yoga is turning into a protest movement.” As I dive into the thought behind yoga (I took a commentary on Patanjali with me to the beach), I focus on how we’re supposed to improve ourselves, find our way to the Atman. But I also recognize the import of the Karma Yoga in the Gita.

Let’s just say that marrying them isn’t settled with me, yet.

I suggest these pieces are at odds not because Wanderlust isn’t politically active (I don’t know one way or the other), but because if you’re just a casual reader of the Times, I think you’d come away with an image of a big dance party gathering focused on fun. The Globe story, by contrast, touches on India’s Baba Ramdev and Off the Mat Into the World (which I know crosses over into Wanderlust):

But there also is what Roseanne Harvey, a Montreal yoga teacher and the co-editor of a new book, 21st Century Yoga: Culture, Politics, & Practice, calls an awakening of “the political body.”

“With this larger wave of commercialization, hybridization and brand identification, there is also a countercultural wave calling out for a more engaged and politicized way of living,” she says.

She also insists there is no fundamental disconnect between the deeper roots of meditative yoga and political involvement – and that a focus on compassion, truth and justice is essential for the practice to remain relevant.

[snip]

The unorthodox activism, Ms. den Otter acknowledges, has sparked a backlash from more traditional yogis, who fear political ideologies may infect the spiritual sanctuary of the studio. “Our answer,” she says, “is to bring yoga into the politics, rather than politics into the yoga.”

But the reality, insists Chelsea Roff, the managing editor of a yoga blog founded by the daughter of bestselling guru Deepak Chopra, “is that we’re already engaging politically. We ‘vote’ every day. Every time I buy a latte at Starbucks, I’m supporting the way they treat people who grow their coffee. Everyone would benefit from bringing more awareness to how we’re engaging.”

Now, contrast that with this from the Times:

This four-day yoga retreat by day, dance party by night is the sort of event that could only happen if a pair of indie rock producers shared office space with an internationally renowned yoga teacher. Which is exactly how Wanderlust, which comes to Santa Monica in abbreviated form in September, was born.

Yoga is one, the other, both? Both, I’m sure we’d all agree — but, again, a casual reader might be left to wonder.

Then there’s the piece about Lululemon and lawsuits. If you are interested in the “business of yoga,” it’s a worthwhile read. But if you are either a political yogi or yogini or of the dance-party version, it could rub you the wrong way:

Founded in 1998, Lululemon took Canada and then the United States by storm with costly, colorful, fashionable workout gear targeted at professional young women. Its shares are up seven-fold since its 2007 initial public offering, and now trade at 46 times earnings.

De Beer compared Lululemon’s suit to tech sector patent wars, such as the high-profile trial between Apple Inc and Samsung Electronics Co Ltd, now drawing to a close.

“The business strategy is to deter other people from even trying to copy designs, because it’s going to cause them legal problems,” he said.

Not exactly “yogic,” right? But I bet Lululemon is among the first thing most people would identify with yoga at this point.

One last thing to leave you with as I get ready to head to Tim’s. Two quick quotes from the stories, first the Times and then the Globe: “But this time they also raise a collective glass and call out with enthusiasm not usually displayed by a bunch of lithe-bodied Lululemon-clad yoginis.” “More practically, most of the millions of students who have lately discovered the joy of yoga are too busy perfecting asanas in hip leisurewear at hot-yoga studios to join campaigns for reform.”

That’s sort of to prove my point. It’s also the type of thing that has been known to set me off a bit. Today, though, I’m chill. And I promise, the rest of the week, recounts of Tim.

Posted by Steve

Bleh. Have to cover this Lululemon story as founder steps down

Remember all the Lululemon-Ayn Rand stories from last fall?

Well, the man behind them — and Lululemon, itself — is stepping down from his post as a company executive, although Chip Wilson’s staying on its board.

This news via Forbes, as well as Rose at YogaRose, who tipped me too it. Apparently, she knows I’m obsessed by all things Lululemon.

Wilson didn’t give an explanation for his departure, but did say: “I feel comfortable leaving the company with [my replacement] Christine Day at the helm of a world class management team whom I fully believe will continue to elevate our world.”

Wilson has parlayed his company into a spot on Forbes billionaires’ list. He’s worth a cool $1.9 billion.

Rand would be proud of that, no doubt!

OK, speculation time:

It would seem after the negative publicity from his Ayn Rand shopping bag PR stunt, that this might be a way to move the company forward. (Forbes said its stock is up a bit after today’s news.) That’s a pretty straight-forward way to handle such things. Until Wilson says more, I suspect it will be the default explanation.

Also in play might be the hit-and-miss take on Lululemon’s stock recently. Lots of watchers still are “bullish” on the company, but others are starting to question how long it can continue to build and expand. Perhaps now seemed a good time for a bit of a “clean break” at the top.

Or maybe he just wants to executive produce the next Rand movie.

Posted by Steve

Hopefully the last Lululemon post: CEO gets praise

Lululemon’s CEO Christine Day last week was named CEO of the year by the Globe and Mail newspaper’s business magazine. Yes, the same Globe and Mail that has run at least one story on the company’s use of the Ayn Rand “Who is John Galt?” quote.

Here’s some of what the mag says:

The success of Lululemon Athletica Inc. (LLL-T50.751.553.15%) has been one of the biggest and arguably most mysterious stories in retail over the past year: a premium-priced product, sold with extensive reliance on feel-good intangibles, flourishing while so many other retailers have flagged. But on a sunny Saturday afternoon in Vancouver, you could pop into any store—the flagship Kitsilano location, for example—and, by doing nothing more than people-watching, easily get a sense of what underscores its success.

[snip]

Christine Day, CEO since 2008, tends to reinforce this sensibility. She says that she considers Lululemon to be “part of, and contributing to, a bigger macro-trend that affects consumers from their early teens to their 70s. Investing in your health will pay big dividends for individuals and society…elevating the world from mediocrity to greatness.”

But then, what’s interesting about the chosen quote is that it layers an interest in community over a reference to Atlas Shrugged, Ayn Rand’s treatise on the essential shamefulness of being merely like everyone else and the necessity that truly great people strive through all obstacles toward individual dominance. Rand’s 1957 novel is one of the core documents of libertarianism, bear in mind. Yet Day makes no bones about acknowledging the inspiration of the book and the life of its author. “I believe in a culture of personal accountability and not compromising your values,” Day tells me. “Atlas Shrugged is both about not accepting mediocrity and being personally accountable for the life you are creating.”

[snip]

If you want to know how Lulu has done it, however, don’t bother reading the financial statements. They reflect good numbers, of course: net revenue up 39% in the second quarter to $212.3 million year over year; comparable store sales 18% higher on a constant dollar basis and income from operations up 74% to $59.5 million (both over the same period). But no matter what the numbers say, when a stock is trading at 48 times earnings in the retail sector, something other than arithmetic is involved. This would be yet another contradiction that Lululemon artfully manages to maintain: in this case, a company seemingly devoted to its “guests” that nevertheless refuses to give them exactly what they want.

[snip]

Lululemon’s expansion, meanwhile, should remain Day’s central concern, Gray argues. “I’m not saying [existing brand features] aren’t important to her, but in terms of day-to-day activities, she has tremendous experience in rolling out a lifestyle brand, and that’s what she was brought in to do.”

Certainly that’s what the analysts seem to think. Although with Day’s remarkable success so far, Edward Yruma of KeyBanc Capital Markets, who follows Lululemon, does not see much upside potential in the stock price; he rates it an underweight. “Lululemon Athletica is one of the best growth concepts in our coverage,” he wrote in a September, 2011, release, “but valuation remains full.” Yruma goes on to say that investors might like to hold off for a better price point before they purchase. In other words: Wait for the inevitable fall.

One gets the feeling that even moderating interest in the stock markets will not deter Day, however. Asked to comment on personal philosophy, she quotes Ayn Rand again: “The question isn’t who is going to let me, it’s who is going to stop me!” I’d say: probably nobody.

I know that’s a big chunk, and I apologize. Check the full story out for more.

Having followed this tale too much — though, apparently, not nearly as much as this person — I think the reason it is fascinating but also so quickly infuriating is that a “yoga brand” isn’t supposed to be about any sort of bottom line. But, in order to be successful, you have to be. (*Cough* YogaWorks *Cough*) If Lululemon weren’t adhering to some Randian philosophy (or if its CEO hadn’t come from Starbucks), none of us would be cradling our butts in its appallingly comfortable and functional pants. Just being good isn’t enough; you have to be good at selling and promoting, too.

And that “me first” attitude certainly runs counter to a pursuit that has at least one foot in a philosophy of dissolving the ego into the whole of the universe.

Think of it as a battle summed up as: Lululem-Aum.

Posted by Steve

‘Sweatin’ Away the Empathy’

One of the great American satirists of our time, Stephen Colbert, did a quick “Tip of the Hat” to Lululemon in an hilarious bit last night. Check it out at about 4:15 in (although the whole segment is worth watching).

“You know–yoga,” he says as he links his fingers together!

We seem to be having a little trouble with embedding the Colbert video, but the link below will take you to it.

Colbert on Lululemon.

Posted by Bobbie

Tired of the Lululemon-Ayn Rand story? The New York Times has its quick say

Just as things were quieting down on the whole Lululemon pitches Ayn Rand’s theories story, the New York Times over the weekend got around to writing about the yoga dust-up:

The company, which is based in Vancouver, British Columbia, has declined all media requests for comment about the campaign. But in its blog, the company said that Dennis J. Wilson, the company’s founder and chairman, first read “Atlas Shrugged” when he was 18 years old.

[snip]

Niraj Dawar, a professor of marketing at Richard Ivey School of Business at the University of Western Ontario, speculated that Mr. Wilson might view the bags as an act of “corporate social responsibility.” But Professor Dawar, who also wrote about the issue on his blog, wondered if the shareholders of Lululemon agreed with Mr. Wilson’s fondness for “Atlas Shrugged” and asked if Mr. Wilson could demonstrate that the campaign would improve the company’s financial performance.

“Chip Wilson’s philosophy may not be shared by customers, and there’s little room for these customers to engage in debate, so some of them will express their opinions by walking away,” Professor Dawar said.

The story, I’ll grant you, doesn’t add much to what already had been brought up by other media. But it helped fill the paper over the Thanksgiving weekend. As I mentioned earlier, we’ll see in December if Lululemon sales show any signs of suffering.

Now, I’m off to practice to try to atone for following Galtgate.

Posted by Steve

If you want your Lululemon pants, better buy ’em now

First off, hat tip and props to YogaDork, which (who?) has done a nice, tidy, and hilarious job covering what I’m going to call (and trademark, thank you very much) Galtgate.

Galtgate, for those who haven’t been paying attention, involves dominant yoga pants maker Lululemon embossing its bags with the question, “Who is John Galt?”

Sound harmless? Sure, if Galt were the Los Angeles Lakers’ most recent draft pick or a Nobel Laurete in chemistry. But he’s a figure in Objectivist guru Ayn Rand’s impossibly long novel “Atlas Shrugged.” (Wikipedia your hearts out here on Rand, if you don’t know much about her me-first, you-last philosophy.)

And all hell’s broken out. The story has been on NPR. Forbes had a columnist do a takedown on Lululemon. And — here’s one I saw via YogaDork — lucy, of all companies, has added a little “open letter” to the mix:

Dear John (Galt),

It’s over between us.

At first I loved hearing you talk about rising above mediocrity and pushing yourself to be your best.  I felt like I had found a kindred spirit who, like me, strived to do my best and achieve great things. But then I realized you’re only out for yourself.

You used to say “friends are more important than money.” But now I know you only meant it when it was convenient for you. I see things differently.  My success would be meaningless if it didn’t include others. So I’m going to go on with my fantastic life of fulfilling work, friends and making a difference…without you.  I hope you are able to find what you’re looking for. Oh, and by the way, your yoga pants are too tight.

Hasta la vista,

lucy

lucy Activewear.  Equality, goodwill and stretch pants for all! http://www.lucy.com

That comes from lucy’s Facebook page.

OK, so now you’re figuring out the headline to this post. Or so you think. It isn’t because you need to run out and buy those pants before your conscious gets the better of you.

It’s because Lululemon, the dominant giant of yoga apparel, may have made a key business mistake. It’s all about timing. Check this out:

This apparel company, which currently trades at $49 a share, has a number of red flags concerning its future. The first problem is the fact that Lululemon has a price to earnings ratio of 42.6 at the moment. This is in contrast to a 5 year expected earnings growth rate of 27.5 percent. Most consider fair value to pay for a stock to be equal to its 5 year expected growth rate. Using that system, LULU would currently be at fair value with a price of $31.62 a share, a staggering 35% decrease to its current price.

That’s right, Lululemon could be in for a major business plunge. And this link isn’t the only one predicting rough seas ahead. But guess what? None of the “business outlook” sites I’ve seen have mentioned Galtgate. So, on top of having a potentially shaky business set-up, Lululemon might also have some serious customer reaction — as in not buying their pants in protest — looming. That would hit the next time the company has to report earnings, and if it already has had trouble come December 1, when it is scheduled to release earnings, the once-darling of yoga wear could become … something that John Galt would have stepped over on his way to the ATM.

Posted by Steve