Lululemon's See-Through Leggings Crisis Highlights Strategic Missteps
Lululemon Athletica Inc. finds itself embroiled in yet another controversy, this time surrounding its "Get Low" leggings that customers have complained are see-through and "not squat proof." The Vancouver-based athletic apparel company's response—suggesting customers simply size up and wear skin-toned underwear—has been met with widespread criticism from both consumers and industry analysts.
A Pattern of Self-Inflicted Challenges
This latest product issue represents what appears to be a pattern of strategic missteps for the once-dominant athleisure brand. According to retail experts, Lululemon has gradually drifted from its core identity as a premium provider of high-quality basics for yoga and fitness enthusiasts. Instead, the company has increasingly pursued trend-chasing strategies and rapid product launches that have alienated its original customer base.
"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."
Financial Fallout and Leadership Changes
The consequences of these strategic errors have been severe. Lululemon's shares have dropped 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. Adding to the turmoil, Chief Executive Officer Calvin McDonald is departing his position this week with no permanent successor identified.
Activist investor Elliott Investment Management has taken a significant position exceeding US$1 billion in the company, while retail veteran Jane Nielsen—formerly of Ralph Lauren—has emerged as their preferred candidate for the CEO role according to sources familiar with the matter.
Internal Response and External Criticism
During a recent company-wide meeting, Chief Brand and Product Activation Officer Nikki Neuburger addressed hundreds of employees at Lululemon's Vancouver headquarters and via video conference from around the world. Rather than outlining ambitious plans for 2026, the gathering focused on damage control regarding the leggings controversy.
Simeon Siegel, a senior managing director at Guggenheim Securities, observed that Lululemon has "chipped away at what made it special." He noted that "their core customers—their early adopters—likely feel disenfranchised. It is no longer the early Lulu that they came to love."
Founder's Activist Campaign
Adding another layer of complexity to Lululemon's challenges, founder Chip Wilson—one of the company's largest shareholders—has launched a full-scale activist campaign. After months of publicly expressing his concerns about the company's direction, Wilson has nominated three directors to Lululemon's board. Sources indicate he is considering creating a dedicated website to provide additional details about his preferred director candidates as part of his effort to secure shareholder support.
Competitive Landscape and Brand Erosion
Lululemon's approach to its signature yoga pants—the product category that essentially created the athleisure market—has become increasingly inconsistent according to industry observers. As trendy competitors like Alo Yoga and Vuori successfully court influencers and Gen Z consumers, Lululemon's attempts to follow suit have resulted in brightly colored, logo-heavy items that frequently end up on sale racks.
One investor, who requested anonymity to speak freely about the company, noted that Lululemon's stores feel dated with leggings displayed on the same pant wall configuration the company has used for over a decade.
Company Response and Future Outlook
In response to mounting challenges, a Lululemon spokesperson stated in an emailed communication that the company remains focused on "continuing to execute against our action plan" and is on track to meet targets for new product styles. The spokesperson expressed confidence in "the strength of our leadership team."
However, the combination of product quality issues, strategic drift, leadership uncertainty, and activist investor pressure creates a complex landscape for the Canadian retail icon as it navigates one of the most challenging periods in its corporate history.
