After Wilson’s statement regarding that the “thigh gap” was a main reason for sheer pants, Lululemon decided to take a step in the right direction and continue to treat its costumers with respect. In the eyes of Chip Wilson not all pairs of Lululemons are designed to fit every women’s body type, especially plus sized women. He stated in his interview “Quite frankly, some women’s bodies just don’t work for [the pants] … It’s really about the rubbing through the thighs, how much pressure is there over a period of time.” The reaction to this interview was strongly negative, showing women in general that Wilson does indeed believe in the idea of the “thigh gap” and the lack of that in our current society.

The issue with the yoga pants was not from the way the product was manufactured, rather the types of women that are using it based on their body shapes. Consumers were not pleased with this statement of the “thigh gap”, ironically while Lululemon is known for its use of positivity. The company incorporates phrases such as ‘Namaste’ with its products, which is a Sanskrit word meaning the ‘acceptance of all due to their inner spark’. Wilson, along with other name brand corporations have an ideal demographic they are trying to target, which does not include plus size women. Throughout this process, Wilson was not using many, if any, positive PR tactics, causing his customer service team to step up and reassure its customers of its product.

In public relations the social learning theory is the knowledge of different norms that are created from social observation. Stereotypes are created and used commonly in our society, especially in different public relations’ tactics. Not fully aware of his actions Wilson, stated that the “size of the thighs” was a major factor for why the pants were becoming sheer. The idea of the “thigh gap” is one that has been invented in our current generation, therefore Wilson uses this phrase loosely, as if women are immune to the overall idea. Wilson believed that this idea is an accepted on, although he is musing the idea completely and hurting his customers rather than helping them. In reality the “thigh gap” is a physical trait that women are unable to change, since the size of our hips determine whether our thighs touch or not. This overall idea has to do with the structure of our bones, which cannot simply be changed with a simple surgery.target, which does not include plus size women. Throughout this process, Wilson was not using many, if any, positive PR tactics, causing his customer service team to step up and reassure its customers of its product.

Many current and new consumers of Lululemon activewear were very unhappy with the statements Wilson had made in his follow up apology. Wilson explains how “sad” and “sorry” he is towards his employees for putting them through such a difficult situation. This statement angered women throughout the world, causing them to lose faith in Wilson and his overall product. Although this caused Lululemons to lose millions, its customer service team was the opposite of discouraged. They handled each phone call with a positive attitude and great feedback, reassuring its customers of their purchases with Lululemon products.

Many women continue to call in asking what specific sizes would be suitable for their body types. To their surprise they received professional and helpful advice from the employees on the phone. They provided customers with store locations, what sizes they wear personally, and also included her own measurements. A service performing company, Stella Service, tested Lululemon to see how its customer service team was handling its customers, and they were impressed. The customer service team took this negative criticism Wilson had created, turned it around, and assisted its customers with full respect, attention, and advice.

By: Ashmere Prasad

Sources:

http://www.huffingtonpost.com/ty-mcmahan/where-founder-fails-to-be_b_4268917.html

http://happycustomer.stellaservice.com/2013/05/06/lululemon-customer-service-performance-recall/

http://www.webpronews.com/lululemon-founder-blames-women-for-see-through-yoga-pants-problem-2013-11

Lululemon was founded in 1998 by Chip Wilson with the reputation of being an “ethical brand” that used local, Vancouver-based labor with a “vision is to elevate the world from mediocrity to greatness by embracing social, environmental and economic health in every party of our organization and in all our global communities.” Its reusable bags with its motivational sayings capture the company manifesto:

 However, with the success of the company, its economic environment changed forcing them to compete in the global market.  To stay competitive in the garment industry, Lululemon had to outsource its production to Asia. This called in to question its ethical standards in regards to overseas factories and treatment of its workers.  In 2005, at the Business Alliance of Local Living Economies, founder and CEO Chip Wilson promoted the benefits of child labor and outsourcing in Asia  to the dismay of many.  Wilson told the delegates of the BALLE BC conference that “third world children should be allowed to work in factories because it provides much-needed wages.”

Unfortunately, Wilson’s defense of child labor in overseas factories showed a sheer lack of understanding of the overseas manufacturing practices and caused great uproar from the publics.

“He was really raising a grey area, and didn’t address the other issues, like where these kids are living, what they’re being paid, if they’re going to school, if they’re being taken care of in those other ways.”

In public relations systems theory explains the relationships between an organization and its publics, and how an organization adapts to the interrelated political, economic and social environments in which they operate. These environments can be internal or external. The systems can be open or closed systems. An open system uses public relations to get feedback, while a closed system does not seek external information but relies on history and the preference of decision makers. In systems theory, understanding the stakeholders affected and keeping them positive about the organization is crucial for success.

Economic and social environments for Lululemon’s overseas production are interrelated.  Lululemon was forced to globalize and outsource due to a changing economic environment that demanded the use of Asian garment factories in order to stay competitive.  At the same time, however, the shift in the social environment has created higher consumer standards that hold organizations accountable for the maintenance of its overseas factories, including fair wages and good working conditions.  To understand consumers cry for greater corporate responsibility, we can look at a 2013 study showing 26% of consumers of a Canadian clothing company with production in one of the ruined Bangladesh factories said “they would no longer purchase the line after the disaster.”

Workers on strike at the Cambodia factory where both Nike and Lululemon are customers. Twenty-three people were injured in the strike by police with riot gear and stun batons.

After Wilson’s statements caused uproar, Lululemon used an open system to get feedback. Though Wilson’s statements were made in 2005, the pre-Twitter and pre-smart phone era, various modes of communication outlets revealed the publics dissatisfaction with the company. Because the feedback was negative, the company took action in two ways to improve relationships with its various publics including consumers, investors and factory workers:

• First, it “hired former MEC auditor Kerri McKenzie, as its production manager” to develop a code of conduct for the company’s overseas operations.
• Next, it hired a third party auditor, Verité, to monitor Lululemon’s international business operations (Duveau). Verité is a fair labor company whose “mission is to ensure that people around the world work under safe, fair, and legal conditions.”

Lululemon’s actions sought to modify its internal environment in order improve public relations.  By hiring a skilled production manager and using a third party auditor whose sole mission is to promote fair labor throughout the world, Lululemon sent a message to its publics that shows its concern with fair labor practices and desire to uphold the ethical standards from which it originated.

In regards to her boss’ statement about child labor, McKenzie was quoted saying, “I can’t answer for the man, he’s misunderstood in his own way.”  In other words, she will do her best as a production manager to monitor its overseas operations and ensure that all workers are receiving the benefits they need and deserve. This is precisely what Lululemon’s stakeholders wanted to hear, and has helped keep the organization in good public standing.

By: Daniella Stach

Sources:

http://sustainability.lululemon.com/our-sustainability-vision/

http://www.lululemon.com/about/manifesto

http://thetyee.ca/News/2005/02/17/LuluCritics/

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/labour-woes-in-asia-the-latest-snag-for-lululemon/article12762550/

http://verite.org/what-we-do

Lululemon Recycles Recalled Pants

Lululemon has come out with a “Second Chance Pant” after the recall of the Luon yoga pants in March 2012.  The recall took place after the company received numerous complaints from customers about the pants being too sheer. The Luon pants were eventually taken off the shelf losing the company approximately $67 million in revenue this past year. Lululemon is now trying to turn that negative public image around by revamping and reconstructing the previously recalled pants. The company called this move “innovative upcycling” they have added extra fabric to the new pants to avoid sheerness.

On the tag for the new pants it states:

1. These pants were inspired by a need to find functional and beautiful design
2. 
   solutions for our sheer pants. This is what celebrating failure looks like!
3. We added mesh panels on the sides and a luon fabric panel across he back to give you the coverage you need in Down Dog
4. Our signature Luon fabric is moisture wicking and four-way stretch

The new pants are priced at $92 only six dollars less than the original pants before they were pulled from stores. The “Second Chance Pants” hit the shelves in mid-October. Along with the re-made pants the company is also producing a thicker replacement for the original pant. The new pant will be called Full-On Luon and is predicted to be in stores by July. The process and choices the company made and went through are an example of Situational Theory.

Situational Theory recognizes that not all stakeholders are actively working equally with others in an organization. For Lululemon their audience was the first to recognize a problem. Soon after the company recognized the problem they decided to do what was best for their consumers and not what was going to necessarily benefit the company financially.

http://www.businessinsider.com/lululemons-second-chance-pants-are-genius-marketing-2013-11

http://www.nbcbayarea.com/entertainment/entertainment-news/Lululemon-Recycles-Recalled-Pants-After-Sheerness-Outrage--232299321.html

http://www.examiner.com/article/lululemon-back-stores-92-recalled-second-chance-pant-on-shelves

After Lululemon suffered from a negative brand image as well as public embarrassment due to the sheer pant recall, the company needed a way to improve their reputation and their products. Hoping to diminish the effects from the sheer yoga pant snafu, Lululemon takes a step forward by hiring a new product manager.

The company went through damage control and hired executive , president of Kmart Apparel. Since Poseley has previous professional experience, the company believed she would help revive the company’s reputation.

Current CEO Christine Day raves of the company’s new chief product officer:

“[Ms. Poseley’s] proven track record in product allocation and planning will help us to maximize the productivity of each Lululemon store,” Ms. Day added. “We have greatly fortified our product engine and execution capabilities, an investment in the business that will pay dividends as we pursue new growth opportunities.”

Lululemon demonstrated the use of Systems Theory in an attempt refresh the public’s viewpoints.

After the former chief product officer Sheree Waterson quickly vacated her position and news of the current CEO seeking a replacement, the retailer’s shares suffered. Their environment seemed to be breaking down and Lululemon needed to rebuild it.

The company needed to find equilibrium between the organization and its publics. They had to adapt their product in order to please their consumers, they had to do major damage control. Their initial action was to hire a new officer to oversee product management.

Four elements can be seen in the Systems Theory that help breakdown the issues within a company:

• Input: Information proved the company had too sheer of yoga pants and the consumers were not pleased
• Throughput: Understanding that the company needs to change their product and the way their products are being produced, including who oversees the production
• Output: Organization recalled the sheer yoga pants, hired a new chief product officer, and is currently seeking a new CEO in order to restore the equilibrium between the company and the public
• Feedback: Lululemon is still in the process of bouncing back. There are still complaints about the pants being too sheer and the perishable quality of the seams for how much the product the cost. The company is also still trying to increase their stock sales

The company’s first actions to improve their yoga pant and their brand image was not successful and the company is continuing to better their status to their reputable name they once endured. After the initial sheer pant issue, the yoga pants continued to be see through, displeasing customers even more.

The company’s stakeholders include the organization, the CEO, other executive positions, as well as their consumers. Lululemon is still in the process of damage control to revitalize their name, hire successful and innovative officers, and ultimately please their customers once again.

By: Mollie Norin

Sources:

http://business.financialpost.com/2013/10/30/lululemon-athletica-inc-names-former-kmart-gap-exec-as-new-chief-product-officer/

http://faculty.buffalostate.edu/smithrd/PR/systems.htm

http://www.nbcnews.com/business/trying-put-yoga-pants-snafu-behind-it-lululemon-hires-new-8C11497826

Chip Wilson Apologizes for the “Repercussions of His Actions”

Following his interview with Bloomberg TV, Lululemon founder Chip Wilson found himself needed to apologize. During the interview, Wilson commented on the recall of the company’s “see-through” yoga pants, and stated that it wasn’t due to faulty material, but rather, “it’s really about the rubbing through the thighs, how much pressure is there over a period of time, how much they use it.”

Three days later, Lululemon posted a video on their Facebook page and YouTube channel, which displayed a teary-eyed Wilson apologizing for the outcomes of his statements. “I’m sad, I’m really sad,” Wilson said. “I’m sad for the people of Lululemon who I care so much about, that have really had to face the brunt of my actions.” The short, fifty-three second video was followed by even more scrutiny from news media and the Facebook community, as the half-hearted apology was referred to as “bizarre”, “a disaster”, and one of the “worst apologies ever”. Rather than taking responsibility for his comments and pleading for his valued customers forgiveness, Wilson seemed to only apologize to his employees for having to deal with this negative attention. There was no explanation for his comments about women being the reason behind the faulty products, or any reference to a feeling of remorse for what he said.

The act of Wilson issuing an apology video is an example of Situational Theory. This theory involves acknowledging that not all stakeholders communicate equally, and highlights the importance of identifying publics as active or passive so as to specially target appropriate messages to these groups in order to meet their needs. There are three variables involved in the situational theory, which allow for the prediction of when publics will seek and evaluate information. These include problem recognition, constraint recognition, and level of involvement.

By recognizing that not everyone would be in agreement with his comments, it was evident that Wilson would need to issue some sort of apology statement after what was said in his interview. Due to the high level of involvement and personal offense that would come as a result of Wilson’s reference of “thigh-rubbing”, it was decided that Wilson’s public address would be released on Facebook and YouTube; both highly populated social media outlets that would allow for millions of viewers to both watch and leave their comments on the video.

Lululemon and Chip Wilson could have approached this situation in a different manor, as the overall effect of Wilson’s apology video is seen as a public relations failure. There was a definite need for crisis management, as his comments during the television interview turned out to be offensive to many women. A businessman should never suggest that his customers are the problem. Rather than take responsibility, Wilson blamed those using his product, which required the need for public relations actions to effectively deal with the backlash that would soon follow.

Although the apology was necessary and done in a timely manner, the format of the video and distribution through Facebook was a questionable strategy. While Facebook does allow for a large audience to access the content, it also gives users an open platform for posting negative comments. Lululemon encouraged a “conversation”, yet this only fueled the fire behind angry customers. Many of the comments left under the video referred to the lack of sincerity and overall misread of content, which suggests that a written statement or some other form of apology could have been a better route.

Furthermore, much of the criticism surrounding the apology video pointed to the fact that Wilson seemed to only apologize to his employees, rather than those he offended with his comments. If he did want to apologize to his employees, he could have done so in a separate form of communication. A separate apology would then need to be made to his customers, and could address how he would work to mend these relationships with the public and move forward in a positive direction.

http://youtu.be/jeFMeBtNRp8

By: Katie MacLean

Additional Sources:

Is Lululemon Chairman’s Apology Worst Ever?

Did Lululemon’s Yoga-Pant Apology Only Fuel the Brouhaha?

Lululemon CEO apologizes after saying not all women should wear the brand’s yoga pants 

Lululemon Athletica is an expensive line of active wear for both men and women that has been under the media spotlight for multiple reasons over the past couple of years.

In March of 2013, Lululemon recalled all of its black yoga pants for being too sheer hence making the items see through. This alone caused shares of the company to fall by 6%. To make matters worse, the employees of many Lululemon stores reacted in quite an inconsiderate manner. While employees should have been extremely conducive with customers’ wants and needs, instead they violated their customers, and made them uncomfortable. Employees asked multiple customers to physically bend over while in the store in order to receive their refunds. One customer, in Canada, was asked to put on the leggings, bend over in the light, and allow the employee to stare at her bottom to decide whether or not they were see through. The customer said she felt “degraded,” and afterwards, the employee deemed the pants not sheer enough for a refund.

Christine Day, Lululemon’s CEO, responds,

“The truth of the matter is the only way you can actually test for the issue is to put the pants on and bend over.”

While this may be the case, this was a completely ineffective response and Luluemon’s stock continued to suffer from this incident. This is an example of Situational Theory.

Lululemon’s CEO, Christine Day, never apologized, and instead resigned from the company.

Her reaction is both an example of the active and passive response:

–Active in that she stepped down

–Passive in that she didn’t try to salvage her consumer base with a simple apology

As for the publics, their response was active. After customers were degraded repeatedly, they made their voice heard. A Facebook page (now removed) was created in which multiple customers voiced their dissatisfaction with the company’s response to a crisis which was entirely the company it self’s fault, and shares of their stock fell by 6%.

There are three variables that help a company predict how their consumers will react to an issue.

1. Problem recognition-the acknowledgement of an issue. It is caused by a difference in the ideal state, and the consumer’s perceived state of an issue. – high
2. Constraint recognition-to what degree consumer’s see their behavior limited by factors which they cannot control. – high
3. Level of involvement- measure of how emotionally or personally a certain problem can be for an individual consumer. – high

This is not an ideal balance for Lululemon. Consumers recognized the problem, felt as though there was nothing they could do to control it, and were extremely embarrassed both emotionally and physically. In return, Lululemon did absolutely no damage control, thus explaining why their stocks fell drastically.

In this example, Lululemon as a whole did a horrible job of communicating with their client base proactively. While most of the publics were active, Lululemon did not respond in the same active manner. The company did not give any of their customers extra attention, and instead began a search for a new CEO, and continued business; making sure that their new line would be less see through: quite a passive reaction.

It is true that public relations strategies do not always have to be blatant, but Lululemon firing Christine Day did not send a clear enough message to consumers that a situation such as this would never occur again. They should have responded to this crisis in a more visible and dramatic way.

Sources:

http://www.nbclosangeles.com/news/local/Yoga-Clothing-Company-Asks-Customers-to-Bend-Over-199766521.html

http://www.dailymail.co.uk/femail/article-2298824/Lululemon-making-customers-bend-verify-sheerness-recalled-yoga-pants-issuing-refund.html

By: Leigh Citerella