Lululemon Athletica, which was beaten up extensively after its yoga pants' fabric was so sheer that it was see-through, announced Monday that its CEO, Christine Day, "will step down once a replacement is found. The board has formed a search committee and the decision is being announced now so it can have a 'healthy transition period,' " Vancouver-based Lululemon said in a statement. Bloomberg reported that the 51-year-old CEO assumed that role in June 2008.
Lululemon shares slumped as much as 15 percent after the news of Day's surprise departure, which came just three months after the company's second major quality issue in less than a year, Reuters reported. Lululemon's chief product officer left in April.
"This was a personal decision of mine and, look, it's never the perfect time to leave a company that you love. I've had a great run at Lululemon over the past five and-a-half years and I'm really proud of what the team and I have accomplished," Day said during a conference call with analysts, Reuters said.
The pants recall came eight months after Lulu admitted problems with dye bleeding from some bright garments, raising fresh questions about whether it could sustain a fast-track growth record while maintaining high quality standards.
The reason the sheer problem was so devastating to the retailer is that it specifically undercut the chain's biggest strength. Lululemon had a powerful reputation as a ultra-high-quality manufacturer of yoga clothes, and many shoppers were willing to pay more for what was perceived as the extra comfort and quality from Lululemon stores. It was precisely because of its reputation for high quality that the sheer problem—which happened shortly after the dye bleeding problem—hurt the company so much.
Lululemon's sheer problem: A heads-up that quality control needs to be rethought?