These are my sized down (size 8) Out & About Pants I picked up yesterday. Slightly more fitted, but the TTS was too big in the waist and since I’m aggressively working on losing weight I think they will be fine in a few weeks. I really love these pants so I’m not surprised they sold out online so quickly. They remind me of J Brand Scuba Jeans. I rolled the cuffs on these about 4 times here but I think it looks best rolled just once or twice.
Today was the Q4 2012 earnings call for Lululemon, and much anticipated after their Monday evening press release in which Christine Day stated there had been manufacturing problem with it’s black luon pants resulting in them having to pull items off the shelves and halt manufacturing until they got to the bottom of the issue. I have felt all along that this is a red herring tactic, and it seems many of the analysts are also left wondering about the strange press release. It was interesting to hear Christine Day back peddle today on her initial claims ‘we have used the same manufacturing partner on key fabrics since 2004. This event is not the result of changing manufacturers or quality of ingredinets. We are working closely with them to understand what happened during the period the products where made‘ These remarks left the blame soley at the foot of the manufacturer which resulted in Eclat Textile Co releasing their own press release in response (after their own stocks suffered as a result of Lululemon’s press release). Today, Christine Day said that ‘If the mistake was ours through some sort of pattern change or whatever, then obviously we are on the hook for that’ and also claimed that it could have been any number of their manufacturers, not any specific one (although you would think they would know where that specific shipment came from) It was interesting to learn just how far reaching this luon problem will be for lululemon, as they claim their manufacturers are currently in production for Summer 2013, which means that that inventory is potentially also effected by this ‘bad batch’. Since luon is used in other garments (tanks, jackets etc) does this mean we will see issues with those products as well? how is it that it’s just the black luon that was effected? I know we’ve identified several instances of sheerness in colored and printed luon (Dune Petite Dot CRB, power y’s made out of luon ‘light’, pop orange WU’s and the Mellow Lemon WU’s that went straight to outlet along with Pop Orange and Faded Zap In The Flow Crops, just for a few examples). Christine Day had also said it was a real mistake, particularly in the canadian market, to eliminate the $100 thicker cotton items (cuddle up, special edition scuba hoodies, limited edition scuba hoodies and Cuddle Ups) during the Christmas season so they will be returning for Winter 2013. Also, there will be another swim and cycling capsule along with a golf capsule. A big variety of mens polos in both athletic fit and slim fit, and expanded men’s line and a more accommodating fit
Some high lights from the question and answer period:
Analyst – “how did it get to where it was shipping without somebody trying on a pair of pants, like the first batch, to make sure that this wasn’t an issue, and stopping it before it got so out of control?” Not so hot answer, “The truth of the matter is the only way that you can actually test for the issue is to put the pants on and bend over. Just putting the pants on themselves doesn’t solve the problem. So it passed all of the basic metric tests, and the hand feel is relatively the same. So it was very difficult for the factories to isolate the issue, and it wasn’t until we got in a store and started putting it on people that we could actually see the issue.” So either lululemon did do quality checks on this batch and where satisfied with the product or they had inadequate quality checks and relied on customers and front end staff to identify problems. According to Eclat Textile Co. Lululemon does a certification of the product before it gets sent out.
Christine Day- Absolutely. Project Canary, as we’re referring to it. We have made significant investments since last year. The issue you’re referring to, the dye issue, where we brought the experts in, rewrote the whole process for dye, and working in partnership with our manufacturers solved the problem. So we no longer have dye issues, and so we can very much say that with confidence.And I feel that we will accomplish the same thing here with the fabrics once we identify exactly where in the chain the breakdown was, and have long term solutions for this. The big shift for us is making sure that we have people actually on site in the mills and the other environments, and that’s the infrastructure that we started investing in this year. And we’ll continue to do so this coming year. This is amazing to me because the dye issue went on for quite some time before Lululemon acknowledged it as a quality issue, after having put the blame on the customer and sweat pH level interacting with the dyes. Christine later admitted that the cause of the dye issue was Lululemon pushing the limits on colors that they knew would have color fast issues (neon dyes). Sounds like perhaps lululemon again pushed the limits on how thin they could make the fabrics before hitting ‘critical mass’ on customer complaints. As you know from my blog, I check fabric content on lululemon product religiously and refuse to purchase luon that has more than 47% polyester.
The whole organization is obviously very devastated by what’s happened. And so everybody understands the sense of urgency of making sure that we alert the small noise and symptoms that we see, the little canary chirps, getting those to us as quickly as possible so that we can deploy the resources to avoid anything like this again. I feel so badly for the front end educators that are the most burdened by these issues (meanwhile, SEC filings show that on Tuesday the executive team increased their bonus structure from 150% to 200%!). I was told last year by a trusted source within that Lululemon corporate admitted to staff that their luon quality was unacceptable and that they were working on bringing back the ‘good luon’ from pre 2011. This new luon was expected for spring 2013. We know the luon was a known problem because they chose to add disclaimers about the sheerness of their pants on their website, and they remarketed Wunder Unders as ‘unders’. They admitted to their staff as long ago as last summer that their luon was a known problem!! I’m reading reports of educators being made to sample the luon garments and do the ‘bend over test’ in front of other staff members to determine sheerness. This is where the integrity of the executive team gets called into question.
Analyst: I wanted to know if you can tell whether the quality issue is isolated to Luon. As you do these vendor checks, is there any other chatter that you’ve heard from the websites and blogs on any other particular products? And then I’ve looked at a lot of blogs and website reviews, and the chatter seems to be taking a very negative tone, particularly when people are returning product back to the stores. I’m wondering how you’re dealing with training the store ambassadors to handle this in a timely manner.
Christine Day: We have put all of our educators on high alert, and making it really seamlessly easy for the guests as well as our (GEC). So communication and training calls with every store manager have already occured to make it seamless for guests to return the product that WE feel is affected. For right now, we primarily see this as an issue with luon. There are a couple of other fabrics that occasionally will have issues, but that’s fairly minor, and nothing that we see is as significant as what we’ve seen in the luon.
And for the Christine Day sound bite of the day:
“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, Just putting the pants on themselves doesn’t solve the problem. It passed all of the basic metric tests and the hand-feel is relatively the same, so it was very difficult for the factories to isolate the issue, and it wasn’t until we got in the store and started putting it on people that we could actually see the issue.”
This picture of the Dune Cool Racerback shows how sheer luon has gotten as they’ve moved away from the Nylon/Lycra blend recipe to a recipe that includes between 47% and 99% polyester. I believe this specific CRB was 97% polyester.
I decided that I needed these Out & About Pants after all since trying them on on Monday for the fit review, and my store had a very dwindled inventory for them so I had to go to another store that was fully stocked. I’ve pretty much sold off all my Studio Pants (except the Dune in case anyone is searching) and I like having a summery style of pant like these that look a bit more put together than sheer pants, or track pants. I initially gravitated to the Dune but decided that since I’m between sizes and the waist in my TTS was pretty loose that I’d size down in them, but the Dune isn’t forgiving enough for that so I went with black. These are super comfortable and I really love that the black ones don’t have a reflective logo on them but a black embossed incognito logo. They are stretchy and comfy and if someone wasn’t scrutinizing my sartorial choices, these could pass for casual non athletic pants. These are the kinds of pants that I think would work well with a CRB and a knit wrap or cardigan and ballet flats. I’m going to keep the tags on them though for the full two weeks since I’d really like them in slate or another mid toned neutral.
Out And About Pant
Out And About Pant with Run: Turn It Up Tee
Very Green Run: Pace Crops, Flow And Go Tank, Run: Stash And Dash Pullover
Run: Stash & Dash Pullover with Run: Pace Tight
Flow & Go Tank in White, Faded Zap and Pop Orange
Embody Crop
Run: Stash & Dash Pullover
Run: Turn It Up Long Sleeve
Run: Turn It Up Tee
As we know, Lululemon has had a major problem with the lack of opacity in all of their luon pants for quite some time (over the past two years!). From Bordeaux Drama and Alberta Lake to their remarketing their very sheer Wunder Under pants to ‘Under Pants‘ back in January, to their disclaimers they added to wunder under pants ‘you may experience sheerness with some of our bottoms’ which they feel absolves them of quality expectations. I’m really not sure what is going on with this new shenanigan of a press release but I’m not buying it. Nor is their manufacturer accepting the blame for something they say Lululemon has mandated and signed off on. So what then is behind this press release?? Is this merely a convenient scape goat for lack luster sales (caused by a long endured lack of quality)? I’ve now heard of a few store closures (Los Gatos Show Room, Burnaby Factory Outlet) and had heard rumors that stores are cannibalizing other stores that have been open for less than a year. I think it’s time the board take a very serious look at what the cost of such quick expansion really is, because you are losing us here. And you are losing integrity while you are at it.
The manufacturer that supplies Lululemon has responded to Lululemon’s press release:
By ARIES POON, Wall Street Journal, March 19 2013
TAIPEI—The chief financial officer of Eclat Textile Co., a little-known Taiwanese sportswear manufacturer that is a supplier to Lululemon Athletica Inc., LULU -3.92% hit back at the yoga apparel company on Tuesday, saying the manufacturer’s clothes weren’t “problematic.”
The move came after Lululemon recalled some of its yoga pants for being too see-through, and blamed the supplier.
“All shipments to Lululemon went through a certification process which Lululemon had approved. All the pants were manufactured according to the requirements set out in the contract with Lululemon,” Eclat Chief Financial Officer Roger Lo said.
The U.S. retailer said in a statement Monday that a mistake by a supplier left its black signature Luon fabric pants, which arrived in stores March 1, too sheer. It has pulled the pants from the shelves and is offering refunds to customers who bought them. The company said the recall may cut its first-quarter sales by 3%-4%. Lululemon shares slipped more than 6% in after-hours trading following the news.
Mr. Lo confirmed with The Wall Street Journal on Tuesday that the company is supplying Luon pants to Lululemon. But he insisted the materials aren’t problematic and that the manufacturing process complies with Lululemon’s requirements.
He said Lululemon hasn’t contacted him or the company since the news broke, so he wasn’t able to tell what might have gone wrong. Mr. Lo said he wasn’t sure where Eclat’s factories produced the Luon yoga pants nor where the materials were sourced from.
“Throughout the whole process, Lululemon hasn’t raised any questions or concerns,” he added.
Eclat, established and based in Taipei since 1977, is a contract manufacturer of functional sportswear and stretched knitwear, designing and producing for brands such as Columbia, Asics and Lululemon.
Over the past 10-odd years, Eclat has been branching out from Taiwan and has built factories in Vietnam, Cambodia, China and Lesotho in southern Africa, induced by tax breaks and lower labor costs.
According to the company’s website, it produces 3.5 million pieces of apparel a month, 45% of which come from its four factories in Vietnam, and one-fifth from its two facilities in Lesotho. Taiwan only houses 14% of its capacity.
On Tuesday, shares of Eclat ended 1.6% lower in Taipei at 122.50 New Taiwan dollars (US$4.11), while the benchmark Taiex gained 0.4%.
Just some of the pre-March 2013 items that may have been effected by sheerness.
Nothing for me tonight. I’m liking the Throw Me Over Hoodie in Dune, but I’m waiting for all the Very Green items to come out. Where is a Cool Racerback in Very Green? Did you guys order anything tonight?
Lululemon just issued a press release prior to their March 21 Q4 earnings call. I’m curious how they will be sending this message that there are quality issues with black luon pants to customers, rather than the investors, because so far the message has ONLY been sent out to investors. I’m a bit concerned about why they have acknowledged sheerness issues with this new batch of black luon in this way, in a press release, but on their website in the past have chosen to use disclaimers about some colors being sheerer than others (burdening the consumer to ‘buyer beware’). As we customers know, sheer luon is not something new since March, but has been going on since at least last summer. What do you guys make of this???
Read: The Globe And Mail: Lululemon’s Material Warning: Pants Shortage Threatens Profit
The Wall Street Journal: Lululemon Has A See-Through Yoga Pants Problem
Speed Demon Run Hat, Run: Turn It Up Tee, Run: Pace Crops
Run: Stash & Dash Pullover Faded Zap
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