While walking by a Lululemon Athletica Inc. store in Nashville last week, I noticed the words “The Great American Yoga Pant Crisis” across the store front window. Thank goodness we survived the controversy, but will the company?
Since Lululemon last month announced a recall of women’s black Luon yoga pants due to sheerness and issued a warning of a yoga pants shortage, there has been a steady media buzz on the story from parodies on late night talk shows to social media. News outlets around the globe seem unable to resist the temptation to make a pun in the headlines.
All jokes aside, the recall amounts to 17 percent of all women’s pants sold in Lululemon stores and the company adjusted their first quarter revenue projections down between $333 million to $343 million from previous expected revenues between $350 million to $355 million. With competitors such as Nike and Under Armour trying to woo customers through aggressive campaigns, the quality control issue at Lululemon is a serious one.
Last week, the company announced its chief product officer was stepping down, and they instituted new senior level capabilities in quality, raw materials and production. These actions are positive steps to remedy the situation and avoid a repeat in the future that will go a long way to ensure consumer and shareholder confidence. Consider the following tips to successfully navigate a PR crisis:
Take responsibility. In the case of Lululemon, the company initially stated quality problems were due to an overseas supplier. The company later accepted partial responsibility and said its testing protocols were incomplete and the fabric used in the pants was “on the low end of Lululemon’s tolerance scale” Accepting responsibility for the lapse in quality was the right move to help restore trust in the company’s leadership and products.
Act swiftly. Once you know the facts on the issue, scope and potential impact on the company, develop a communications action plan and follow it through. It’s critical to have the necessary tools in place to effectively communicate to both internal and external audiences. These tools should include key messages, FAQs, media response statements, social media responses and internal communications such as a letter to employees so everyone is informed and empowered to communicate to key stakeholders as appropriate.
Respect customers. Customers are more powerful than ever, taking to social networks to rave about their favorite brands and rant about them when they make a mistake. In light of the yoga pants issue, Lululemon pulled products from store shelves and offered refunds to customers. The refund policy initially drew some criticism but was clarified and ultimately a successful strategy to repair customer relationships and get beyond the controversy.
Lululemon may have taken a few hits when the story broke but as long as the company continues to focus on improving its production processes they should be able to weather this storm with their reputation and loyal customers intact.
What do you think? How did Lululemon handle the PR crisis? What impact will it have on the company?