Lululemon Has a Secret that Undermines its Reputation

When your brand relies on an intangible sense of specialness, it makes you vulnerable to attack.

Witness Lululemon, the trendy yoga clothing maker that scoffs at traditional products. Today the New York Times published a story revealing that a test of clothing made of the company’s VitaSea fabric could not be proven to contain any seaweed, despite claims to the contrary.

Update: see Lululemon Defends its Reputation (includes questions about the validity of the NYT’s testing methodology), and Lululemon Changes their Product Descriptions.

The stock dropped in price Wednesday, and you can bet other Lululemon claims will be closely examined for verifiability.

And check out this pseudo-response by founder and board chair Chip Wilson:

“If you actually put it on and wear it, it is different from cotton.That’s my only test of it."

Huh? That’s the best he can manage? How about something of substance? How about something about doing better testing of suppliers’ claims?

The company is in expansion mode, so reputation is extremely important to protect right now.

Best observation on the mini-scandal — Herb Greenberg on Wilson’s chatter 

about The Secret: 

"The company’s CEO Chip Wilson is a follower, for better or for worse, of ‘The Secret,’ the latest incarnation of the power of positive thinking. In his musings on his company’s website, he talks about the ‘law of attraction.’

"Among the examples: Thieves attract thieves. People with integrity attract people with integrity. Liars attract liars."

Also see the company that supplies the fabric to Lululemon.

Tags: lululemon, retail, business, clothing, fashion, the secret, stocks, investing, shorting, ceo, quotes