Lululemon Athletica Inc. has dispatched employees to overhaul offshore production and that its chief product officer would be departing the company. The announcements follow the company’s March 18 decision to recall 17 percent of its women’s yoga pants because they were too sheer.

After an evaluation of Lululemons previously disclosed black luon production issues, the company concluded that the current specification and testing protocols for the signature fabric luon that were developed in 2006 have not materially changed, the company said in a statement released Wednesday.
However, production of luon is a complex process with a number of different inputs, and fabric is the key factor. While the fabric involved may have met testing standards, it was on the low end of Lululemons tolerance scale and we have found that our testing protocols were incomplete for some of the variables in fabric characteristics. When combined with subtle style changes in pattern, the resulting end product had an unacceptable level of sheerness.
Lululemon had taken steps prior to the black luon issue to bolster its internal product expertise, including the addition of senior level capabilities in quality, raw materials and production. This new team was instrumental in determining the root cause of the issue and has initiated three work streams to address what we believe are the contributing causes.
Lululemon listed the work streams as:
 
  • Testing & processes: Lululemons quality team is assessing all luon products in the production pipeline according to newly implemented rigorous testing and quality processes that includes revised specifications for modulus (stretch), weight and tolerances. 
  • Factory oversight: Lululemon employees have been stationed in factories to monitor and test products and will educate internal teams and manufacturing partners on new testing standards and methodologies. 
  • Leadership and structure: Lululemon is building a stronger internal structure with new leadership and cross-functional team capability that we believe will create a more robust organization to support our long-term growth strategy.

 
Our stand for differentiation is the quality of our product,”  said Lululemon CEO Christine Day. “We have been building capacity in the product organization, and we recognize that continued investment in this segment of the business is required to support our future. We are committed to continually developing best in class fabrics, and are committed to only putting product in our stores that meets our stringent standards.

Based on our evaluation to date, there is no change to the companys first quarter and fiscal 2013 earnings guidance that was provided on March 21st, 2013.
Lululemon also announced that Chief Product Officer Sheree Waterson will be leaving the company effective April 15, 2013. We appreciate the many contributions that Sheree made during her time with Lululemon, particularly in the area of design, said Lululemons CEO Christine Day.
Waterson joined Lululemon in 2008 and has over 25 years of consumer and retail industry experience.