Lululemon Case Study

 Lululemon Athletica, Inc. and Founder Chip Wilson’s Public Relations Crisis JOMC 431 | Group Case Study Team Carolina Communications Lizzy Sirkin, Jennifer Hicks, Hannah Haas, Caroline Dodd Lululemon Case Study
2 Introduction and Outline Lululemon Athletica, Inc., a luxury yoga and athletic sportswear company, and its founder, Chip Wilson, have come under fire by consumers, critics and the media following a series of public relations controversies that have developed over the past few years. Since the first of these crises occurred in 2005, after Wilson made remarks about his belief in the legitimacy of child labor, the company has experienced a loss of customers, a continually changing value in the stock market, and a great deal of criticism. A second crisis in March 2013—a recall of 17 percent of all Lululemon yoga pants—only added fuel to the fire. The impact of these and other events led Wilson to resign as chairman of Lululemon and cease all public commenting. In this paper, we provide a comprehensive look at the rise and fall of Lululemon Athletica, progressing through the many public controversies that targeted the brand over a period of roughly eight years. We also suggest various ways in which Lululemon can recover from this period of crisis by developing a strong brand identity and rebuilding trust between the company and its diverse publics. These recommendations will follow an in­depth analysis using a SWOT and ITAL framework to examine Lululemon as a whole and analyze the stakeholders impacted by Wilson’s faulty leadership. Lululemon Athletica, Inc. Founded in 1998 by Chip Wilson, Lululemon has created a higher standard for luxury sportswear, specifically for running and yoga, internationally. The company thrives off its mission to create products that help people to live longer, healthier, fun lives. This mission was implemented in the company’s first store that was created as a “community hub where people could learn and discuss the physical aspects of healthy living from yoga and diet to running and Lululemon Case Study
3 cycling as well as the mental aspects of living a powerful life of possibilities” (Lululemon Athletica). From that point, Wilson decided his employees’ and the company’s purpose would be to make a positive influence on all customers that entered through Lululemon’s doors. The company, based in Vancouver, Canada, offers complimentary yoga and self­defense classes in every participating Lululemon Athletica location. Additionally, the company promises that if its products do not work for the customer, returns will be accepted at any time, a sincere and bold assurance of Lululemon’s quality (Lululemon Athletica). As of Feb. 2, 2014, Lululemon Athletica owns 254 stores in the United States, Canada, Australia and New Zealand. Lululemon trades on the NASDAQ exchange (NASDAQ:LULU) at a share price of $63.12 as of March 13, 2015, up 13.14 percent year­to­date (Yahoo, 2015). This serves as a testament to the popularity of this unique athletic fabric and the company’s wholesome mission. Chip Wilson According to Forbes, thanks to Lululemon, Wilson is now worth $2.2 billion (2015). The entrepreneurial billionaire created the sportswear empire after he sold his first company, Westbeach Snowboard Ltd., took his first commercial yoga class, and experienced a feeling similar to the exhilarating rush of surfing and snowboarding. The concept for Lululemon’s signature technical athletic fabric was created after Wilson decided that the cotton clothing he used was completely inappropriate for the sweaty, stretchy power yoga he practiced. After this realization, Wilson created a design shop that doubled as a yoga studio to sustain the economic strain of the high­end athletic attire Wilson was creating. Yoga instructors gave rave reviews of the innovative clothing and buzz about Wilson’s creation lent itself to Lululemon’s quick success in the luxury sportswear industry (Lululemon Athletica). Lululemon Case Study
4 Throughout his time at Lululemon, Wilson served as chief executive officer, chief innovation and branding officer, chairman to the board and a board of director member until he stepped down in 2015. On his resignation, Wilson stated, “I have achieved the goals I set when I came back, and after careful thought, I believe that now is the right time to step away from the board. I leave behind a new and talented management team and new board construct (PR Newswire, 2015).” Wilson is now focusing on entrepreneurial work in Vancouver and aid work in Ethiopia. Timeline of Public Relations Crisis As stated before, Chip Wilson founded Lululemon Athletica to provide better clothing components for both yoga enthusiasts and runners in 1998. Initially the clothing was sold through yoga classes, until November of 2000, when the first Lululemon Athletica storefront was opened in Vancouver, Canada (Lululemon Athletica). Although Lululemon expanded rapidly internationally, it did not take long for controversy to surface. In January 2005, Wilson made remarks supporting child labor at the Business Alliance of Local Living Economies in Vancouver.He attempted to justify his views on child labor, telling the delegates present at the conference that third world children should be allowed to work in factories because it provides them with much­needed wages. It was during this same conference that Wilson told Canada's National Post Business Magazine that he named the company Lululemon because of the difficulty Japanese people have pronouncing it, arguing that it would give him a marketing edge in the country. These comments were addressed by Kerri McKenzie, Lululemon’s production manager. McKenzie argued that the quick success of Lululemon and the personality of Wilson led to him being misunderstood in the media (The Tyee, 2005). Lululemon Case Study
5 In an interview with the Calgary Herald later in 2005, Wilson said that making plus­sized clothing was a “money loser, for sure,” saying he would not produce clothing over a size 12 because it allegedly required 30 percent more material. Wilson went on to say, "I understand their plight, but it's tough," arguing that plus­sized women would not react to this well, and would boycott the company (Bhasin, 2013). For several years since its opening, Lululemon had been manufacturing a clothing line called VitaSea, allegedly made with seaweed, which boasted the ability to release “marine amino acids, minerals and vitamins into the skin upon contact with moisture”. However, in November of 2007, after several weeks of testing, the New York Times found the line to contain none of the elements Lululemon claimed. In reaction to these findings, Lululemon was forced to remove all VitaSea marketing, although they continued to claim that laboratories in Hong Kong had found these elements in the fabric (Story, 2007). Two years later, on March 30, 2009, Wilson came under fire once again for his controversial remarks posted to the Lululemon blog on the company’s website. Wilson made brash claims that smoking and birth control had led to international high divorce rates. "Women’s lives changed immediately [after the pill]. ... Men did not know how to relate to the new female. Thus came the era of divorces." He went on to say that his company was formed in reaction to female education levels, breast cancer and yoga. These comments led to an uproar from the public, the press and many Lululemon customers. Wilson never acknowledged either his comments or the backlash in a public setting (Peterson, 2013). Lululemon Case Study
6 Roughly three years later in January 2012, Wilson left his position as chief innovation and branding officer and moved to Australia with the intent of disassociating himself from the brand. Shortly after this, however, on March 22, 2013, the Lululemon Board of Directors asked Wilson to return after another mishap involving yoga pants that were found to be too sheer by customer standards. Immediately following this discovery, Lululemon begrudgingly recalled 17 percent of the yoga pants, costing the company around $60 million in lost sales. A leading Lululemon executive and eventual CEO, Christine Day, went to the media explaining how the pants had passed quality assurance tests. Day claimed “the truth of the matter is that the only way that you can actually test for the issue is to put the pants on and bend over (Clifford, 2013).” Although Lululemon acted appropriately and quickly in the recall of the product, it did not take long for Wilson to step in and ruin the situation for the company. On Nov. 5, 2013, Wilson said, “Quite frankly some women’s bodies just don’t actually work for it,” in an interview with Trish Regan on Bloomberg Television’s “Street Smart” (Regan, 2013). These comments created substantial backlash from women everywhere, who were outraged by Wilson’s audacity. Tweets and comments from thousands of women caused this incident to become even more public, and Lululemon’s stock lost significant value as a result. After yet another incident involving Wilson’s poor word choice, he was forced to apologize. Six days later on Nov. 11, 2013, Wilson uploaded an apology video to his employees and company shareholders for the repercussions of his interview (Lululemon Athletica, 2013). This apology was poorly executed and thus it did not take long for Wall Street to react. On Jan. 13, 2014, Lululemon stock dropped further, by approximately one­third. Quickly following this incident, Wilson announced his resignation as chairman and refrained from making any further Lululemon Case Study
7 public comments. A year later on Feb. 2, 2015, Wilson finally stepped down from the Lululemon Board of Directors (Peterson, 2015). The image below depicts the plummeting share prices of Lululemon stock from February 2013 to June 2014. Key Publics Lululemon’s key publics generally include its employees, consumers and shareholders, as well as the media and competitor brands such as Nike, Athleta and Under Armour. The Lululemon Case Study
8 employees included in these publics are not only the executives, but the in­store employees and all of Lululemon’s labor force. Feminist activist groups are also a key part of those affected within the consumer category as they are likely to be offended and affected by Wilson’s inappropriate comments. The media was heavily involved in this case as they are the ones that emphasized the inappropriateness of Wilson’s comments against women’s body in the Bloomberg Television interview. Lastly, shareholders were negatively affected when stocks quickly dropped as Wilson ruined Lululemon’s image and competitors reaped the benefits of the company’s downfall. SWOT Analysis Strengths: Even though Lululemon has had bad press in the past few years, the company as a whole has many strengths. On the most basic level, it is a strong brand that has a widespread reputation of making high­quality products for posh, young women and men. The company also facilitated the yoga pants trend and, as a result, has successfully established itself as a brand for the fashionable girl or guy. Lululemon’s brand identity is comparable to that of Ugg boots. People buy the product because they think it’s the cool thing to do. This connection with young people also explains the company’s next strength—a solid social media presence. Lululemon’s Twitter account has over 720,000 followers and its Facebook page has over one million likes. These numbers are most likely caused by the company’s knack for developing creative content that captures readers’ attention and facilitates two way communication. In addition to these ongoing strengths, Lululemon has developed some new strengths as the brand has attempted to pull itself out of crisis. For example, the new CEO of Lululemon, Laurent Potdevin, is extremely experienced, as he is the former president of TOMS and CEO of Lululemon Case Study
9 Burton. Also, Potdevin reportedly has a strong vision for the future of the company (Lululemon Athletica, 2013). In addition, Lululemon stock increased 20 percent in February alone, which shows that the company is starting to bounce back (Yahoo, 2015). Weaknesses: Despite the multitude of strengths, Lululemon also has some weaknesses. First, the strong reputation that glorifies the brand has also made it more vulnerable throughout this crisis. Lululemon is known to make high quality products, a claim that was compromised through the recall scandals. The combination of Lululemon’s high­profile brand status and its failure to meet quality standards makes the company prone to negative double jeopardy. The mistake will draw more attention in the public eye and angry consumers are more likely to launch an anti­brand campaign on Lululemon than on a smaller, less established corporation. This issue is further exacerbated by the fact that the founder is both outspoken and offensive. Wilson has a long history of making racist, classist and sexist comments that precedes the current crisis. As a result, any attempts to apologize for his comments will most likely appear insincere since this behavior is clearly a norm for him. The next weakness is rooted in the current public relations crisis—Lululemon is gaining a hypocritical reputation. To put it plainly, no company whose focus is supposed to be on health and wellness should promote negative messages on body image. Wilson’s statements broke the social contract Lululemon had with its consumers and the company is paying the price. Lululemon’s final weakness is its response to the current crisis. No steps have been made to right the wrongs of the former CEO. Even though the company is trying to move past this issue, it has not done anything to heal its relationship with disgruntled publics. Lululemon Case Study
10 Opportunities: With these strengths and weaknesses in mind, it is also important to examine the opportunities Lululemon has to move past this crisis. The first opportunity the company has is the chance to set the record straight. Though nothing has been done to fix the crisis so far, it is not too late for Lululemon to show its true values through advertising and possibly engaging in some corporate social responsibility. This is especially salient now that Wilson is stepping down from the board. Bringing in some new executives offers the opportunity to re­brand the company’s leadership and show that even though Wilson has some inappropriate values, the company is distancing itself from him. Finally, the company has the opportunity to shift the conversation away from bad publicity. Since Lululemon is opening a wave of new stores in Europe, it can start focusing media attention on its successful business practices instead of Wilson. This will be especially helpful in assuring shareholders that the company is doing just fine. Threats: Most of the threats Lululemon is facing are grounded in today’s attitudes toward and expectations of corporations among consumers. At the most basic level, discriminatory attitudes are simply not tolerated by the public or the media. If the rest of the board shares Wilson’s beliefs or values, then it needs to be stamped out or it will bring the company down. Negative attitudes on body image are particularly harmful because so many other companies have crafted campaigns around promoting positive messages to enhance self­esteem. Dove, Always and Special K are just a few examples of companies who have chosen to focus their corporate social responsibility efforts on idealizing real women instead of supporting the Lululemon Case Study
11 unattainable standards often portrayed in the media. When compared to these companies, Lululemon appears to have an extremely out of date set of values. The company’s final weakness is that it does not have a monopoly over athletic wear. There is an abundance of competitors, such as Nike, Under Armour and Athleta, that consumers can turn to for their athletic wear needs. Lululemon cannot alienate its consumer base because those consumers can choose to take their business elsewhere. ITAL Analysis Issues: Lululemon’s public relations issues for this case can be broken down into three parts: an association with Wilson and his inappropriate behavior, a reputation for not caring about consumers, and a lack of transparency. Lululemon’s most pressing public relations issue is its connection with Wilson and his highly controversial opinions. Wilson has been cited time and again for remarks that appeared to be strongly influenced by both sexism and racism, as well as a support of child labor practices internationally, thus inciting outrage on the part of consumers and stockholders alike. Wilson’s most recent comments on the Bloomberg interview were particularly inflammatory because they dived into the sensitive subject of body image. By telling consumers that some women’s bodies simply do not work for Lululemon apparel, Wilson openly discriminated against heavier women. Feminism is an incredibly strong movement and the backlash from this comment was both prompt and pronounced. Women everywhere took to social media to make their negative views of Wilson heard and to encourage others to boycott Lululemon. One social media activist, Kathleen Walker, for example, said “Maybe it is women’s problem that #lululemon pants fabric pull. It is also our problem if we spend money on Chip Wilson’s products.” Wilson’s comments Lululemon Case Study
12 also struck a chord with women in the media. Laura Beck from Jezebel, for example, was quoted saying, “I am a size 18 yogi and Lululemon can kiss my fat ass.” This is especially problematic for Lululemon, a company that is supposed to promote an image of health and serenity, because it appears to be drifting away from its mission and is starting to develop an incredibly hypocritical reputation. The reality is that these comments do not just reflect poorly on Wilson, but they also create mistrust among consumers toward the company as a whole. The past has shown that Lululemon consumers find the CEO of the corporation responsible for the attitude and reputation of the company itself. In 2009, for example, Wilson’s rant on Lululemon’s blog page drew this specific type of criticism. Rather than identify Wilson as a “bad egg” in a thriving, positive organization, the public identified the entire brand name with Wilson’s outlandish claims that smoking and birth control led to higher nationwide divorce rates. This not only showed the company to be running under a man who appeared unstable and brash, but also painted the picture that Lululemon was not a trustworthy company. A second issue in this case is Lululemon’s apparent lack of concern or care for its stakeholders and consumers following Wilson’s previous run­ins with controversy. The company’s response to these controversies in the past have been untimely and did not effectively show real concern for the repercussions of Wilson’s unacceptable behavior. This negligence took many forms, but was perhaps most evident in Wilson’s empty apology, which was received by the public as disingenuous and careless. A lack of honest, direct and open communication with the public and Lululemon’s stakeholders have colored how the public have seen the company and how they respond to public complaints and issues. As a result, when the company was launched into this most recent crisis, the public was less receptive to its communication efforts Lululemon Case Study
13 because consumers had already become disenchanted with Lululemon and did not feel valued by the company. This mix of negligence and inappropriate representation in the public eye have been powerful factors in Lululemon’s brand performance during these ongoing controversies, but the company has also experienced some other issues that supplemented the ill feelings among consumers. In particular, Lululemon’s lack of transparency regarding one of its product lines could be considered one of the most harmful issues facing the company because it threatens the brand’s identity. Lululemon advertised its VitaSea line as containing seaweed that would release “ marine amino acids, minerals and vitamins into the skin upon contact with moisture.” Despite this, the product was later found to have zero traces of any extraordinary elements in the material. This false advertising made Wilson and the company appear untrustworthy and also significantly devalued the product. This is a problem because superior quality fabric is essential to the brand’s identity. If consumers start to believe that the athletic wear is nothing special, then they will start buying the less expensive products from Lululemon’s competitors. Overall, this complete lack of transparency was another major hit to Lululemon, which by this time was already facing the impossible task of making amends for the actions of its CEO. While Lululemon was forced to take the VitaSea products off its shelves immediately following the discovery, its actions were not fast enough for the press and public, who were quick to attack. Lululemon’s issues—an association with Wilson, limited concern for consumers, and a lack of transparency—can all be understood under the broader theme of poor communication. Wilson’s comments, the biggest hit to the brand’s name, went largely unchecked, which means Wilson is not the only one at fault. Lululemon showed poor communication by not showing the Lululemon Case Study
14 public that it did not endorse the statements of its CEO. In addition to this, the period of time taken to respond to the press, public and consumers in regards to these issues can easily be seen as another weakness in Lululemon’s communication strategies. These communication issues were at the heart of the destruction of the Lululemon brand. Tactics: In dealing with this crisis, Lululemon and Chip Wilson used three main tactics: ignore the situation, create a video apology and attempt to rebrand its leadership. When this PR crisis first hit, Lululemon appeared to ignore the many problems entirely. There was no acknowledgement of the issues or communication effort of any kind from the company or Wilson until four days after the Bloomberg TV interview (Stoncek 2013). It appears that Lululemon was hoping that Wilson’s inappropriate comments would fly under the radar or that the controversy would blow over quickly. This strategy is similar to the one used by the Canadian Cancer Society when it was dealing with allegations of misappropriated funds. In both of these cases, the organizations chose to wait several days before making any public statements. This strategy was ineffective and ultimately detrimental to the Canadian Cancer Society and Lululemon suffered a similar fate. This is actually a strategy Lululemon has used multiple times in the past. For example, the social media platforms for the company are primarily used for promotion and have not been used to comment on crises at all. Once it became clear that this crisis was not going away, Lululemon chose a new strategy. The company decided to create a video apology to share on its social media accounts. In the video, a teary­eyed Wilson apologizes to Lululemon employees for the repercussions of his actions and claims to take responsibility for the events that had occurred (Lululemon 2013). It is extremely important to note that this apology was in no way directed toward consumers or to the Lululemon Case Study
15 massive amount of people he insulted with his comments. In addition, the language of his apology was poorly constructed. Instead of saying “I am sorry for the comments I made,” Wilson said, “I am sorry for the repercussions of my actions” (Lululemon 2013). This gives the viewer the impression that Wilson does not truly regret his words, but instead is simply sorry he got caught saying them on camera. The insincerity of Wilson’s apology can be best seen when compared to the apology issued from David Neeleman, JetBlue’s founder and CEO. Neeleman’s apology, which was very well received, started with a direct appeal to JetBlue customers, included a promise for a better future and, most importantly, ended with a total admission of guilt and expression of regret (JetBlueCorpComm 2007). Wilson’s apology did not include any of those elements, and, as a result, the video fell flat. After the apology launched, Lululemon returned to its initial tactic of ignoring the issue. Though the video was not well received, it was not followed up by any further communications from the company about Wilson’s comments. In December 2013, one month after Wilson’s interview with Bloomberg TV, the company announced in a press release that Wilson would be resigning from his position on the Board of Directors (Lululemon 2013). Though Wilson claimed that his decision to resign sprouted from his belief that the company was back on track and could function without his guidance, the timing of this change suggests Lululemon was trying a third tactic to recover from the crisis—attempting to rebrand the company’s leadership. In fact, in the same press release that announced Wilson’s resignation, Lululemon also announced that Laurent Potdevin would be taking over as CEO of the company (Lululemon 2013). The communication efforts about this transition focused heavily on Potdevin’s effective leadership experience and passion for community­focused marketing strategies—two things Wilson noticeably lacks. It seems that this Lululemon Case Study
16 move was Lululemon’s attempt to distance itself from Wilson and his inappropriate remarks and effectively show consumers that it is moving in a better direction. Analysis: Lululemon’s tactics of ignoring the situation, creating a video apology geared towards employees, and attempting to rebrand its leadership were ineffective in both restoring the company’s broken relationship with consumers and calming the media outrage. The decision to ignore the bad press and wait several days to respond only angered the public and added more fuel to the fire. In the four days it took for Wilson to issue an apology, hundreds of media outlets covered the story. As a result, neither Wilson nor Lululemon were able to control the narrative. Instead of regulating the message through controlled media, such as a news release, Lululemon essentially let reporters have free reign over the story. This tactic is similar to the one used by Bill Cosby’s public relations team throughout his rape allegations crisis. In that case, everyone assumed Cosby was guilty because he did not make a public statement to address the rumors. Similarly, consumers assumed that Lululemon’s values aligned with Wilson’s because the company never made an effort to say otherwise. The sound bites from the Bloomberg interview should have been a red flag for the company’s communications team to start preparing a response. As a result of that misstep, Lululemon only strengthened its connections with Wilson’s controversial opinions and reinforced the notion that it doesn’t care about its consumers. In addition, the delayed response suggested that the company was trying to cover something up, which further agitates the existing transparency issue. Though the YouTube apology to employees was intended to show Wilson’s sincere remorse, it actually had an adverse effect. The primary issue was that the video addressed employees rather than consumers, thus breaking the cardinal rule that customers should always Lululemon Case Study
17 come first. Wilson needed to emphasize that Lululemon’s customers are of the utmost importance to the company and also thank them for their support and patience during such difficult times. Additionally, Wilson should have been clear and specific about his wrongdoings and apologized for each mistake he made. Sincerity is key in apologies; Wilson should have apologized for the comments themselves, not the repercussions of the comments. By not owning up to his mistakes, Wilson’s apology seemed insincere and superficial. Again, this only exacerbated the initial issue of Lululemon’s apparent lack of concern for its stakeholders. Finally, though Wilson’s resignation was a good step in the right direction for Lululemon’s rebranding efforts, it should have happened immediately after the Bloomberg interview. Wilson’s comments caused a great deal of damage on the company’s reputation. In order for Lululemon to show consumers that Wilson’s comments did not reflect the company’s values in any way, Wilson needed to step down from his position as soon as possible. Similarly, although the decision to replace Wilson with Potdevin, an incredibly competent and well­loved leader, was the right move for Lululemon, the company should have announced this change in leadership much earlier. This is especially true considering the fact that this was not the first time Wilson had created a mess for the company’s leadership. Overall, this tactic did distance Lululemon from Wilson and his controversial opinions, but it would have been more effective if the Board of Directors had acted faster in removing Wilson and finding a replacement. Lessons Learned: The first and most overarching lesson learned from this public relations crisis is for people, especially spokespeople, to remember to think before speaking. The remarks made by Wilson were offensive to the general public, harmed the company’s image and negatively affected Lululemon’s stakeholders. His words about certain body types being unsuited Lululemon Case Study
18 for Lululemon’s products were a rushed response to a question that should have been practiced multiple times with a public relations professional prior to the interview. Due to his seemingly unprepared interview, Wilson came off as insensitive and rude. Other organizations can learn from this mistake and be sure that all brand representatives are media trained. In addition, organizations can learn to be prudent in selecting a spokesperson. Since Wilson’s personality is so outspoken and opinionated, it would have been wise for the company to keep him out of the limelight. Second, it is absolutely key to remember that customers come first in any business. No matter how successful a company becomes, its future is always in the hands of its consumers. Wilson’s decision to solely apologize to his employees at Lululemon for his harsh words only increased the gap between himself and the customers he insulted. It also made it seem like he did not care about those truly impacted, thus making Lululemon as a whole look unsympathetic. When an organization undergoes a crisis, it has to make sure it addresses all the stakeholders affected by the issue. If Wilson had apologized to the consumers directly, Lululemon may not have received such a severe backlash. Another lesson that stems from this apology is the importance of accepting guilt, as many people were angered by the fact that Wilson apologized for the repercussions of his action, not his actual behavior. In fact, Wilson should have initially acknowledged that Lululemon was to blame for the massive recall of their see­through yoga pants. Instead, he directly averted the blame on customers’ bodies and why they are not ideal for the pants instead of admitting that the fabric was not the high quality product promised. Due to this lack of acknowledgement and ownership of the problem, Wilson made the company look weak and defensive instead of confident and sincere. Organizations can learn from this case that Lululemon Case Study
19 accepting blame and apologizing is always a better route than being defensive and argumentative. The third lesson in this case is the importance of a crisis communication plan. After all of Wilson’s offensive statements, Lululemon also failed to acknowledge that there was an issue. The company had to have known that Wilson’s actions had negatively affected the company based on stock prices alone, yet still it did nothing in terms of communication with the public. Though Wilson was eventually removed from the company, Lululemon did not try to reach out to customers and apologize. Lululemon has yet to do anything to rebuild their brand other than replacing executives, something that many customers are unaware of. Additionally, a new CEO does not help to fix Lululemon’s tarnished image concerning its recalled products or now­confused company message. Clearly, Lululemon needed a communication plan in place to act proactively, instead of reactively, after all of these public relations mishaps. If the company had invested time in formulating what messages they wanted to communicate to their publics, they may have been able to quickly apologize to anyone offended by Chip Wilson’s statements. With a communication plan, Lululemon could have had a strategy prepared to announce and publicize its dissociation with Wilson, its new association with CEO Potdevin, and acknowledgement of all the mistakes that had taken place. The final lesson in this case is that every negative public relations crisis offers an opportunity to rebuild and revitalize. The one good thing to come of these public relations problems is the huge opportunity Lululemon has to rebrand itself. This is now the perfect time to make things right with its new CEO as the spokesperson. However, if Lululemon does not take Lululemon Case Study
20 advantage of this time and keeps operations and advertisements as is, they will lose any customer holding out for an explanation or apology for Wilson’s mistakes. Recommendations Before Lululemon can continue to grow, it must first right the wrongs of Chip Wilson. After the crisis storm has blown over, Lululemon will then have the opportunity to rebrand itself. Its rebranding needs to show consumers the company’s commitment to a healthy body image and high­quality materials. Lululemon’s dedication to its customers’ needs to be communicated. This could be achieved, for instance, through social media outlets, events, partnerships, campaigns, and other methods. Social Media and Corporate Social Responsibility: Due to the nature of its scandalous past and the time that has passed since Wilson stepped down from the board of directors, Lululemon has the opportunity to now rebuild its image. While big apologies and loud marketing could actually draw the public eye back to the missteps of the past, a well­timed, individualized approach to Corporate Social Responsibility could launch a new beginning for the Lululemon Athletica brand. Lululemon is particularly well situated to make this move since its new CEO, Laurent Potdevin, has such a strong public image of devotion to community and outreach. In fact, Potdevin is best known for his work with TOMS Shoes, an organization whose “One for One” campaign provides shoes to needy people. With Potdevin at the helm, Lululemon will appear more forward thinking and progressive, as this new leadership is already known for Corporate Social Responsibility efforts. Now that a sufficient amount of time has passed since Wilson’s controversial statements, Lululemon can take advantage of the fact that much of the public has already forgotten about its Lululemon Case Study
21 missteps and turn over a new leaf by launching a branded movement for the empowerment of women everywhere. While the brand has been lying low, the media landscape has been continuously changing. In the past few years, campaigns like Dove’s #realbeauty or Always’ #likeagirl promotions have become increasingly popular and more and more brands are putting their name behind a message, rather than just on the front of advertising. This is an important step for Lululemon to take and the company can use Dove and Always as inspiration, since both of their campaigns deal with positive body image. We suggest that the company uses #MyLululemons to launch a similar promotion. Lululemon can use the #MyLululemons campaign to not only stabilize its marketing strategies in an ever­changing environment, but also to make amends for past mistakes without drawing attention back to those mistakes. Wilson’s remarks about his product and female bodies were targeted, harmful and disrupting to the national discussion on body acceptance and self­love. Now, Lululemon can launch a campaign that makes every individual customer feel cared for, listened to and supported by this brand. Lululemon would not only be able to make an entrance back into the spotlight, but it could do so while promoting a positive environment for the many customers personally impacted by Wilson’s words. #MyLululemons would be an opportunity to make peace with the public while encouraging public participation in an ongoing movement for body positivity. Users across social media platforms could interact with Lululemon on an individual level, sharing their thoughts on the campaign, ideas on promoting a good body image, and most importantly, how they use their Lululemon products to lead a fulfilling and exciting life. Lululemon Case Study
22 Through promotion of the #MyLululemons hashtag, Lululemon would be extending an open invitation to the customers who were directly affected by its missteps to join in a conversation about body acceptance. Targeted advertising of this campaign can popularize the movement. Rather than be remembered for the public relations disasters of the past, Lululemon would be associated with a movement encouraging individual women, regardless of where they are in their fitness journey or how they wear their Lululemon apparel. This movement, as a form of Corporate Social Responsibility, positively associates Lululemon with individual’s body acceptance. This movement would simultaneously open up more dialogue about positive body images while promoting Lululemon as a redeemed company. When an individual user uses the hashtag #MyLululemons, social media correspondents for the company can then interact with them, reposting the unique uses of Lululemon apparel and commenting words of encouragement to the individual. Re­posting and communicating through social media will promote the idea that Lululemon does not view its customers as a singular mass, but as individuals. A campaign and movement of this nature is critical because it shows Lululemon as a brand that does not promote itself, or force ideas onto consumers, but rather exists to benefit the lives of those who use its product lines. With Wilson’s history, the brand came across to the public as money hungry and careless. No concern was shown for the actual customers in the days following Wilson’s many rants, or after advertising about product lines was found to be false. Trust needs to be restored between the individual consumer and the company. This would give the company a chance for a fresh start, moving on from the past and showing the public that they care about people. Now is the time to right the wrongs of the past by engaging the public through social media platforms and targeted marketing using the hashtag #MyLululemons. Lululemon Case Study
23 New Line of Clothing: With the new social media campaign in mind, this is the perfect time for Lululemon to work on launching a new product­line. Since Wilson’s detrimental comments generalized and degraded women by referring to them as one homogeneous group, this product line offers the opportunity to change the conversation by targeting women on an individual level. In particular, to show its customers that Wilson’s comments do not align with the company’s core values and principles, Lululemon could create a new yoga pant line to show that beauty comes in all shapes and sizes. In order to remain in sync with the social media hashtags, the name of the new yoga pant line should be “My Lululemons.” My Lululemons should have five different types of pants—“ My Pear Shape,” “ My Hourglass Shape,” “ My Apple Shape,” “ My Petite Shape,” and “ My Slender Shape.” The fit of each of these paants should be based on the standard proportions for those types of figures and should be offered in a wide selection of sizes, instead of the company’s standard 4, 6 and 8 sizes. Tracy Anderson came up with a similar idea for her yoga pant legging line which consists of four different types of pants: hipcentric, abcentric, omnicentric and glutecentric (Well and Good, 2012). For her product launch pictured below, she had four celebrities with one of the body types above model the leggings. Lululemon Case Study
24 Instead of using celebrities or models for My Lululemons, Lululemon should follow Dove’s #realbeauty campaign and use real women to model the leggings. Lululemon stores could could pin up a different picture every day of different customers who tried on each of the five types of leggings. This would show that Lululemon not only cares about its customers but also supports women having a healthy body image and feeling comfortable in their own skin. Lululemon Case Study
25 Since the other issue involved with this case was the poor quality of the fabric of the yoga pants, Lululemon should use a more durable fabric for the My Lululemons line. Additionally, Lululemon should have a satisfaction guarantee, providing an opportunity for people to get a refund if the quality of pants is not up to the customer’s standards. Advertising Campaign: Lululemon desperately needs to get the word out that they are an all­inclusive company when it comes to body shapes and sizes. One way of achieving this in a bold manner is to employ a widespread advertising campaign flaunting the company’s acceptance of all people. These ads should feature women and men that are an assortment of weights, ages and ethnicities doing something active while wearing Lululemon clothing. This activity could vary from rushing through an airport to mountain climbing, as the company sells a large variety of everyday and workout clothing. The key to these advertisements achieving the all­inclusive message is including a one­liner about Lululemon clothing being the perfect fit for anyone. By personalizing each one­liner to whatever activity is going on in the photo, it forms a personal connection with the consumer of the advertisement if they do a similar activity. By targeting the individual in this manner, Lululemon may be able to recreate the bonds that were lost from Chip Wilson’s offensive actions. Finally, these ads must feature the hashtag # MyLululemons.This will be a way to publicize the social media campaign and new product line paired with the advertisements. The ads will serve as a prerequisite to the social media campaign and hopefully provide consumers with a hint at what the hashtag intends to achieve. Lululemon Case Study
26 This advertising strategy is somewhat similar to that of Lane Bryant’s. The company has produced a new advertisement that is a clear jab at the lingerie giant, Victoria’s Secret. The advertisement Bryant remade is one that is featuring stick­thin models with “The Perfect Body” as the caption, clearly insinuating that the perfect body is one similar to a model’s. Lane Bryant, which promotes women empowerment and self­confidence, created a very similar ad with women of all different shapes and sizes with the hashtag #ImNoAngel as the caption. As a result, the hashtag has generated over 7,000 tweets since April 13, 2015. Thirty­seven percent of these tweets are positive in nature with the majority of all the other tweets being neutral or news­related (Schwartz, 2015). Clearly this campaign has been very effective and serves as great evidence that the #MyLululemons hashtag would do well in the current marketplace. Lululemon Case Study
27 Lululemon Case Study
28 Summary Lululemon’s communication strategies in this public relations crisis was, for the most part, lackluster. There are some important lessons to be learned from this meager crisis management. First and foremost, Lululemon should have put the customers’ needs before anyone elses. Wilson should have directed his apology to the customers in addition to the employees he addressed in the YouTube video. Additionally, Lululemon should have acknowledged its role in the problem and created a thorough communication plan to tackle any future and current public relations crisis. In response to Wilson’s rude statements, Lululemon should have assured its consumers that his comments did not align with what the company stood for. Finally, an important lesson learned was “think before you speak.” Wilson should have known the demands of his executive positions and kept his comments to himself. Despite the inevitable negative impact the crisis had on the company, Lululemon has seized the opportunity to turn things around and start anew. Lululemon has successfully positioned itself as “the go­to yoga pant” brand. However, with such a title comes responsibility, which Lululemon is unfortunately lacking. Lululemon needs to accept this responsibility and make moves to not only position themselves as the most desired brand, but also as the most admired brand. Lululemon Athletica still has a chance to rebuild its image and brand. Carolina Communications has suggested that the athletic company follow three recommendations to holistically regain the trust of all publics possible. The first recommendation is to create a new line of clothing entitled “My Lululemons,” a new yoga pant line to show that beauty comes in all shapes and sizes. Second, Lululemon must engage in Corporate Social Responsibility. The Lululemon Case Study
29 company can achieve this by featuring the hashtag #MyLululemons and encouraging women of all shapes and sizes to share why they love their Lululemons. This campaign will focus on launching a branded movement for the empowerment of individual women everywhere. This hashtag and movement will be advertised through a series of advertisements featuring people of different weights, ages and ethnicities doing something active while wearing Lululemon clothing. This will promote the idea that Lululemon wants a diversity of consumers and that everyone is welcome to become a Lululemon customer. Through these strategies, Carolina Communication believes that Lululemon can restore and strengthen its brand and image despite the wrongdoings of its founder Chip Wilson. Lululemon Case Study
30 Appendix A Bhasin, Kim. "Shunning Plus­Size Shoppers Is Key To Lululemon's Strategy, Insiders Say." TheHuffingtonPost.com, Retrieved March 16, 2015, from http://www.huffingtonpost.com/2013/07/31/lululemon­plus­size_n_3675605.html Bustle. (n.d.). Retrieved March 16, 2015, from http://www.bustle.com/articles/2959­does­lululemon­shun­plus­size­shoppers Clifford, S. (2013, March 21). Recall Is Expensive Setback for Maker of Yoga Pants. Retrieved March 16, 2015, from http://www.nytimes.com/2013/03/22/business/lululemon­says­ yoga­pants­mishap­will­be­costly.html Feiereisen, Sharon. (2012, June 11). Tracy Anderson Launches a Luxe Line of Workout Leggings for Edition01 . Retrieved April 10, 2015, from http://wellandgood.com/2012/06/11/tracy­anderson­launches­a­luxe­line­of­workout­legg
ings­for­edition01/ JetBlueCorpComm. (2007, February 19). Our promise to you. retreived from https://www.youtube.com/watch?v=­r_PIg7EAUw Lululemon Athletica. (n.d.). Retrieved March 16, 2015, from http://www.lululemon.com Lululemon Athletica (2013, December 9). lululemon athletica appoints laurent potdevin as chief executive officer. Retrieved from: http://investor.lululemon.com/releasedetail.cfm?Re lease ID=812698 Lululemon Athletica (2013, November 8). A Message from Chip Wilson. Retrieved from: https://www.youtube.com/watch?v=jeFMeBtNRp8&noredirect=1 Lutz, A. (2013, March 22). What Lululemon Will Do With Its See­Through Yoga Pants. Lululemon Case Study
31 Retrieved March 16, 2015, from http://www.businessinsider.com/recalled­lululemon­yoga­pants­2013­3 News, C. (2007, November 16). Lululemon to remove claims from seaweed clothing line. Retrieved March 16, 2015, from http://www.cbc.ca/news/business/lululemon­to­remove­claims­from­seaweed­clothing­li ne­1.655660 Peterson, H. (2013, December 10). 8 Outrageous Remarks By Lululemon Founder Chip Wilson. Retrieved March 16, 2015, from http://www.businessinsider.com/outrageous­remarks­by­lululemon­founder­chip­wilson­
2013­12 Peterson, H. (2015, February 2). Lululemon founder Chip Wilson resigns from board. Retrieved March 16, 2015, from http://www.businessinsider.com/lululemon­founder­chip­wilson ­resigns­2015­2 Regan, T. (2013, November 3). Lululemon Pants Don't Work for Some Women: Founder. Retrieved March 16, 2015, from http://www.bloomberg.com/news/videos/b/0132a382­ cee3­41db­88af­fa2ed73f1762 Schwartz, M. (2015, April 8). Lane Bryant. Retrieved April 13, 2015, from http://www.prnewsonline.com/water­cooler/2015/04/08/lane­bryants­imnoangel­campaig n­takes­on­victorias­secret/ Story, L. (2007, November 13). ‘Seaweed’ Clothing Has None, Tests Show. Retrieved March 16, 2015, from http://www.nytimes.com/2007/11/14/business/14seaweed.html?pagewanted=all Lululemon Case Study
32 The Tyee – Yoga Mogul Has Critics in a Knot. (n.d.). Retrieved March 16, 2015, from http://thetyee.ca/News/2005/02/17/LuluCritics/ Wallace, A. (2015, February 7). Chip Wilson, Lululemon Guru, Is Moving On. Retrieved March 16, 2015, from http://www.nytimes.com/2015/02/08/magazine/lululemons­guru­is­moving­on.html?_r=0