Lululemon yoga pants: No more sheer terror?

The chastened apparel maker is trying to put a humorous spin on the story, but it has an awful lot at stake in getting this right.

By Jonathan Berr Jun 4, 2013 11:40AM
File photo of Groove pants on display at the Union Square Lululemon retail store in New York, on Sept. 15, 2010 (© Benjamin Norman/Bloomberg via Getty Images)People wearing Lululemon's (LULU) iconic black Luon yoga pants should no longer see red.

The Canadian company says it has fixed the manufacturing problem in those pants that made them too sheer and forced Lululemon to pull them from the market earlier this year. Though Lululemon is using humor to address an embarrassing situation, it isn't a laughing matter.

The affected pants accounted for about 17% of its total sales before the recall. The chief products officer resigned as a result of the fiasco, and the company slashed its earnings outlook. Lululemon lost between $57 million to $67 million in sales because of the recall.

According to the company blog, Lululemon has teamed up with "university scientists" to develop a "sheer-o-meter" that measures the amount of light that shines through the fabric while being stretched at varying degrees. The company also bragged that the pants go through 15 tests to ensure that consumers get "great coverage" on their backsides. Shoppers can consult with an "educator" at its stores to make sure the pants fit correctly.

Lululemon's clothing isn't cheap. The yoga pants retail for about $98, while the tank tops fetch about $64 because of what Bloomberg News describes at its "carefully cultivated reputation for quality."

Rivals such as Nike (NKE) and Under Armour (UA) may be able to capitalize on Lululemon's stumble. The see-through pants were the latest quality control problem to have dogged Lululemon, which was also plagued by the bleeding of bright colors. Moreover, Lululemon's fabric supplier in Taiwan denied that it was at fault for the sheerness problem.

Yoga is a big business. According to the 2012 "Yoga in America" study, the U.S. has 20.4 million practitioners who spend $10.3 billion on everything from yoga classes to products and equipment. That's an increase from a 2008 estimate of $5.7 billion.

Shares of Lululemon, which reports quarterly earnings on June 10, were higher in Tuesday morning trading. Ironically, the negative publicity surrounding "sheer-gate" caused more people to go its stores to see the "situation" for themselves, according to Bloomberg.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

More on moneyNOW

Jun 4, 2013 1:50PM
They hired a new Chief Products Officer. His name is Kamal Tho.
Jun 4, 2013 3:43PM
$98?? Really? And they're worried about losing money? These pants probably cost less than $2 to manufacture. And given the safety issues with overseas textile & garment factories, who with a conscious would wear them?
Jun 4, 2013 12:41PM
No camel or moose toe jokes?  Wow!
Jun 4, 2013 3:06PM
all great things must come to an end.
Jun 4, 2013 7:03PM

Almost forgot. Keep Californication out West, please.


Jun 4, 2013 1:57PM
I just cant believe that woman wear these everyday, it is so tacky unless you are actually going to Yoga class, not for everyday use. OMG. women that are way curvier should not be wearing these unless you have a shirt covering you whoo ha. Really.
Jun 4, 2013 11:16PM
YEAH....they lost money because they tried to go cheep because where these are made they buy fabric like any other it's weight. Just like a lot of CHEEP clothing that they are trying to sell to the consumer as stylish. YUCK! Now they will have to recoup all the lost revenue by charging 100 bucks a pair. They really think we are stupid. don't they? Some will still buy it...just like Yoga itself, in my ever so humble opinion. Just a phony crock of BS! 
Jun 5, 2013 9:03AM
To think I was going to take up Yoga !!!
Jun 4, 2013 7:01PM
Sounds like a money-maker for the manufacturer. Cheap materials, high-dollar price. Yoga is big business???? Really??? Not in my neck of Ohio. I'll stick to durable wash n wear quality, and ignore *fashion* . As they say: this, too shall pass.......
Jun 7, 2013 7:34AM
Nothing wrong with females doing the moose knuckle shuffle in  expensive see thru pants did they not look in the mirror before buying them.
Jun 4, 2013 11:12PM
The look cheesy, if you ask me. You could sew them yourselves in about twenty minutes and you pick the fabric. REALLY! What some people fall for!    
Jun 4, 2013 11:10PM
No kidding! 98 bucks for a couple of dollars of cheep (now less cheep) fabric...and yes, heavy women, please say "NO" to the yoga pant...PLEEEEEASE!
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