Lululemon's Sheer Leggings Crisis Exposes Deeper Brand Challenges
Lululemon Athletica Inc., the Vancouver-based athletic apparel giant, finds itself embroiled in yet another controversy that analysts describe as a self-inflicted wound. The company's recent "Get Low" leggings, retailing at US$108 per pair, have sparked widespread customer complaints about being see-through and lacking adequate coverage during physical activities.
Questionable Response to Product Quality Issues
Rather than acknowledging product defects, Lululemon executives offered what industry experts consider a tone-deaf solution to customers. Chief Brand and Product Activation Officer Nikki Neuburger recently told hundreds of employees that customers should simply size up and wear seamless, skin-toned underwear beneath the leggings to address transparency concerns.
"Honestly, that's a joke," said Neil Saunders, managing director of GlobalData. "You are selling a premium product, you shouldn't have to issue instructions to women on how to wear leggings because your product is defective."
A Pattern of Strategic Missteps
This leggings controversy represents just the latest in a series of strategic errors that have plagued Lululemon in recent years. The company has increasingly drifted from its core identity as a provider of high-quality basics for yoga and fitness enthusiasts, instead chasing trends and rushing products to market.
Several high-profile initiatives have failed to resonate with consumers:
- Confusing collaborations with disparate brands like Walt Disney Co. and Erewhon
- An unsuccessful US$500 million venture into fitness equipment
- Failed attempts to expand into personal care products
Simeon Siegel, a senior managing director at Guggenheim Securities, observed that Lululemon has "chipped away at what made it special." He added, "Their core customers — their early adopters — likely feel disenfranchised. It is no longer the early Lulu that they came to love."
Competitive Pressures and Brand Dilution
As trendy competitors like Alo Yoga and Vuori capture market share among influencers and Gen Z consumers, Lululemon has struggled to maintain its relevance. The company's attempts to appeal to younger demographics through brighter colors and larger logos have largely backfired, with many of these items ending up on sale racks.
One investor, speaking anonymously to discuss the company freely, noted that Lululemon stores feel dated, with leggings displayed on the same pant wall configuration the company has used for over a decade.
Financial and Leadership Turmoil
The consequences of these strategic missteps have been severe:
- Lululemon's shares have plummeted approximately 65% since reaching record highs in 2023
- The company is projected to report its lowest annual sales growth since going public nearly two decades ago
- Chief Executive Officer Calvin McDonald is departing this week with no permanent successor identified
Activist investor Elliott Investment Management has taken a substantial position exceeding US$1 billion in the company. According to sources familiar with the matter, the firm favors retail veteran and former Ralph Lauren executive Jane Nielsen as its preferred CEO candidate.
Founder's Activist Campaign Intensifies
Chip Wilson, Lululemon's founder and a major shareholder, has launched a full-scale activist campaign against the company's current direction. After months of public criticism, Wilson has nominated three directors to Lululemon's board and is reportedly considering creating a dedicated website to promote his preferred candidates as part of his shareholder voting campaign.
A Lululemon spokesperson stated the company remains focused on "continuing to execute against our action plan" and expressed confidence in meeting targets for new styles and leadership strength.
This latest controversy over sheer leggings has become emblematic of Lululemon's broader challenges as it navigates leadership transitions, activist pressure, and the difficult task of reclaiming its position as a premium athletic wear leader while addressing fundamental product quality concerns that have alienated its core customer base.
