Introduction
Lululemon Athletica Inc. is a luxury yoga and an athletic sportswear corporation that was founded by Chi Wilson. The company has been under intense pressure from its clients, critics as well as the media due to several public relations disputes that have developed over a few years ago. According to this case, the first issue occurred in 2005 when Wilson made remarks concerning his belief regarding the legitimacy of child labor. This made the firm experience a loss of clients. Consequently, the occurrence of a continuous changing value in the stock market, and a great act of criticism.
The second crisis took place in 2013 where there was a recall of about 17% of the company's yoga pants added fuel to fire. The issue led to the lawsuit where the compensation committee of the company agreed to increase its executive bonus plan some weeks before recalling the Luon yoga pants over the well-documented sheerness problems. Moreover, the contention of the retirement funds was that the board members of Lululemon were aware of the sheerness issues in advance before approving the bonuses. Therefore, they could have explained the costs to the company. The result of these events made Wilson resign from the chairperson's post thereby, ceasing all comments to the public. This paper presents a brief background of the case and defines various problems that Lululemon and its leaders experienced. Similarly, it also discusses some suggestions that can make the company recover from the period of management crisis through development of strong identity of the enterprise's products. This has been achieved by suggesting the action plans for the problems and their causes.
Problems that Lululemon and its leadership faces
Lawsuits
Robbins & Dowd LLP, filed several cases on behalf of the individual investors such as Houssam (Ashworth, 2013). They were claiming for the violations of the federal security laws by the Lululemon and its managers and directors. They specifically alleged that the corporation did not reveal the real reason why the Luon yoga pant was a debacle, something that was meant to cut costs while improving profits.
Transparency
The company has always experienced issues for being open with the investors. That is it did not present a complete reflection of what was taking place with its business operations. However, this habit needs to change periodically to keep the company's growth in the motion. This made the corporation to face another lawsuit over the vagueness of the enterprise. The quality issues were direct since the organization was cutting the costs to boost the proceeds. Moreover, it was also selling the yoga pants at a discount to maintain its market share, but it did not notify the investors (Lutz, 2013). Additionally, the company held discussions regarding the dismissal of the CEO, Christine Day without the opinion of the investors. The serious allegations also led the company to another lawsuit.
Despite the company’s abilities, it was weak concerning brand reputation. That is a strong reputation for glorifying the products made it more vulnerable throughout its operations. However, the company is known for making high quality products. But this claim was compromised via the recall of several scandals. Moreover, the combination of high profile status of the products for Lululemon and its fiasco to fulfill the customers' needs regarding quality standards makes the firm more liable to adverse jeopardy. Therefore, these mistakes will draw more attention to the public perspective and angry consumers will likely to launch an anti-brand campaign on the corporation as compared to the smaller or less established company. The issue is further supported by the fact that the founder of the firm is outspoken and offensive. Similarly, the founder has a good background of making racist, and sexist remarks and this precedes the present problems of the corporation. Therefore, any of his attempt to apologize for the sentiments will likely appear insincere because his conduct is a norm for him.
The modern public relations is another problem that the firm is facing. Lululemon is gaining a deceitful reputation. That is the company that is focusing on health and wellness should not encourage negative and abusive messages regarding body image. Consequently, the statements of Wilson broke the social contract that Lululemon was having with its clients, and the firm is paying for the price. Finally, in the efforts to response the current crisis, the corporation is making no step to correct the wrongs of the previous CEO. However, the firm is trying to override these problems, but it has not done something to restore its relations with the dissatisfied society.
Analysis
The tactic of Lululemon for ignoring the situation, creating an apologetic video towards the employees, the attempt to carry out rebranding in its leadership were all ineffective while restoring the broken image of the company with its consumers and calming of the media outrage. The company decided to ignore the bad press and wait for many days to respond to the angry clients. After four days, Wilson apologized, and many outlets of the media covered the story. However, neither Wilson nor Lululemon as a company was capable of controlling the narrative. But instead of controlling the information through a regulated media coverage such as the press release, the company allowed the reporters to have full control over the issue.
The consumers also made an assumption that the value of Lululemon was aligned with Wilson because the firm made any attempt to correct the situation. According to the sound bite of Bloomberg interview, it could have raised a red flag for the communication team of the Lululemon so that they can start responding (Sirkin, Hicks, Haas & Dodd, 2015). Due to this misstep, the corporation strengthens its connection with the controversial views of Wilson. Moreover, it also reinforced the concept that it does not care about the customers. The delay in responding shows that the enterprise was attempting to hide some information, and this facilitated the existing problem of transparency.
The intention of the YouTube was to apologize to the employees so as to show the sincerity of Wilson; this had adverse consequences. The main concern was that the video should address the workers instead of the customers. This further broke the cordial rule that clients should always be the king that is they should come first. Wilson was to put more emphasis that the customers of the company are the most important people to Lululemon Inc. Additionally, he should appreciate their support and patience during the difficult periods. He was to be clear and precise concerning his mistakes and apologize for his misconducts. Sincerity is the main element of apology. Therefore, Wilson should have apologized for the statements instead of the consequences of the comments. Instead of not owing to his mistakes, the apologies were treated as insincere and superficial, and this worsened the previous problems of the apparent inadequate concern for the shareholders of Lululemon.
The resignation of Wilson was a good step towards the right direction especially for the efforts of rebranding Lululemon. This is because his comments interfered with the reputation of the company. For the purpose of showing the customers that the sentiments of Wilson did not show a reflection of the values of Lululemon, he was to resign from his position a long time ago. However, the decision for his replacement with an incredible, competent and loved leader was the right step for the company, and it ought to have to make the announcement of such changes much earlier. This is factual when because it was not the first attempt for Wilson to create a mess in the leadership of Lululemon. According to the case study, this approach did not separate the company and Wilson from his controversial ideas. On the other hand, it would have been effective if the directors had acted immediately to replace Wilson.
Findings
The lesson learned from this case regarding public relations crisis is meant for the individuals particularly, the spokespeople. This is because the remarks from Wilson were very offensive to the general public. Consequently, it affected the image of the Lululemon as well as the reputation of its shareholders. For instance, some of its words about particular types of bodies that were being unsuited for the company's products were considered as a rushed response to certain queries that could have been carried out several times with experts from the public relations before the interviews. Similar organizations should also learn to be careful while selecting their spokespeople. The personality of Wilson was outspoken and narrow-minded. Therefore, it would have been a wise decision to keep him away from Lululemon Inc.
Action plan
Before Lululemon to proceed in its growth, it should do away with the insults of Wilson. Then after this problem blown over, the corporation will have to enjoy the rebranding opportunities. Moreover, when rebranding, it should show clients that the company is committed to a healthy body image with materials of high quality. Similarly, the dedication of Lululemon to its customers should be communicated through social media, company's outlets, partnerships, events, campaigns as well as other activities.
References
Ashworth, W. (2013). Lululemon faces a second Lawsuit. Should Investors Be Worried?
Lutz, A. (2013). What Lululemon will do with its see through yoga pants?
Sirkin, L., Hicks, J., Haas, H., & Dodd, C. (2015). Lululemon Athletica, Inc., and Chip Wilson's Public Relations Crisis.
