NOWCAST NewsCenter 5 at 7
Watch on Demand
Advertisement

Lululemon nosedives 21 percent because its spring leggings are boring

The culprit, according to CEO Laurent Potdevin: Its clothes don't pop online
CNN
Lululemon nosedives 21 percent because its spring leggings are boring

The culprit, according to CEO Laurent Potdevin: Its clothes don't pop online

WEBVTT RELATION, BUT YOU HEARD IT.KELL THE MARKET IS LOOKING ATTHE WHITE HOUSE AGAIN TODAY.THERE IS WORD THEY ARE BEGINNINGTO TALK ABOUT TAX REFORM ANDPUSHING THAT AS PERHAPS THE NEXTITEM ON THE TRUMP AGENDA.THE MARKET AS WE TAKE A LOOK ATTHE REAL-TIME NUMBERS, YESTERDAYEXCEPT FOR THE DOW, THE REST OFTHE MARKET WAS UP.THE DOW WAS SLIGHTLY LOWER ONCEAGAIN AND WE ARE OPENING UPCLOSE TO THE FLATLINE, DOWNABOUT BOTH POINTS.JEFF BEZOS HAS PASSED WARRENBUFFETT TO BECOME THE WORLD'SECOND RICHEST PERSON BEHINDBILL GATES.THE AMAZON FOUNDER AND CEO'SPERSONAL WEALTH RISING TO $75.6BILLION YESTERDAY THANKS TO A 2%JUMP IN AMAZON'S STOCK.THE COMPANY'S MARKET VALUE INOW WAY UP THERE.HUNDREDS OF BILLIONS OF DOLLARSAND BEZOS OWNS 17% OF AMAZON'SSTOCK.WHAT A GREAT STORY FOR HIM TOSTART THAT COMPANY FROM SCRATCH.SHARES OF LULULEMON WERE SET TOTANK 18% AT THE OPENING BELL.AFTER CLIMBING 4% YESTERDAY.DESPITE SEVERAL BIG PURCHASES BYTHEIR EXECUTIVES LULULEMON WARNS, THAT OVERALL SALES THISQUARTER WILL DROP.WHY?BECAUSE THEIR NEW LINEUP OFLEGGINGS ARE TOO BORING FOR SOMECONSUMERS.THE CEO SAYS THEIR STYLES ARELACKING DEPTH IN COLOR FORSPRING.WOW.AND THAT VISUAL MERCHANDISINGWASN'T STRONG ENOUGH.IT'S RUSHING MORE COLORFULOPTIONS TO ITS WEBSITE.LULU IS ALSO FACING TOUGHCOMPETITION FROM COMPANIES LIKENIKE AND CHEAPER OPTIONS FROMSTORES LIKE OLD NAVY.WE HAVE SEEN THAT BEFORE WHEREWE HAVE A PREMIUM COMPANY LIKELULULEMON AND SUDDENLY PEOPLECOME IN AND UNDERCUT YOU ON
Advertisement
Lululemon nosedives 21 percent because its spring leggings are boring

The culprit, according to CEO Laurent Potdevin: Its clothes don't pop online
CNN
Things aren't looking bright for Lululemon and its brand of luxury athletic wear.Lululemon stock fell 21% Thursday, one day after the company predicted its sales would drop this quarter. The culprit, according to CEO Laurent Potdevin: Its clothes don't pop online."We have clearly identified the issues: An assortment lacking depth in color for spring, compounded with visual merchandising that did not powerfully translate our design vision," Laurent said on a conference call for investors.To stave off the problem, Lululemon will launch more colorful clothes on its website as soon as next week, Potdevin said.The company's problems aren't all internal, though. Lululemon faces intense competition from companies like Nike, which is more than 10 times its size.The athleisure brand had a solid 2016, with same-store sales rising 4%. But the company warned that sales would sink in the current quarter, which would give its competitors room to grow.Lululemon has been hurt by problems with its merchandise before. In 2013, a recall of black pants that were too sheer -- in other words, see-through -- hit sales and profits. Former CEO Christine Day stepped down after the debacle. And in 2015, Lululemon recalled some women's tops because hard-tipped drawstrings were injuring wearers.

Things aren't looking bright for Lululemon and its brand of luxury athletic wear.

Lululemon stock fell 21% Thursday, one day after the company predicted its sales would drop this quarter. The culprit, according to CEO Laurent Potdevin: Its clothes don't pop online.

Advertisement

"We have clearly identified the issues: An assortment lacking depth in color for spring, compounded with visual merchandising that did not powerfully translate our design vision," Laurent said on a conference call for investors.

To stave off the problem, Lululemon will launch more colorful clothes on its website as soon as next week, Potdevin said.

The company's problems aren't all internal, though. Lululemon faces intense competition from companies like Nike, which is more than 10 times its size.

The athleisure brand had a solid 2016, with same-store sales rising 4%. But the company warned that sales would sink in the current quarter, which would give its competitors room to grow.

Lululemon has been hurt by problems with its merchandise before. In 2013, a recall of black pants that were too sheer -- in other words, see-through -- hit sales and profits. Former CEO Christine Day stepped down after the debacle. And in 2015, Lululemon recalled some women's tops because hard-tipped drawstrings were injuring wearers.

Top Picks

Airlines will now be required to give automatic cash refunds for canceled and delayed flights
What a TikTok ban in the US could mean for you
Rossen Reports: New scam warning for car buyers
Pregnant woman walks out of second-story Oklahoma apartment to find stairs gone