Lululemon CEO Christine Day to step down after sheer-pants scandal
Lululemon Athletica Inc.’s black yoga pants may have made a comeback after being recalled for being too sheer, but the same can’t be said for the company’s chief executive, Christine Day.
Five and a half years after taking over the helm at the Vancouver, Canada, yoga wear brand, Day will step down once a replacement is found, Lululemon said in a statement Monday.
Board members formed a search committee to find Day’s successor but decided to announce her departure to ensure “a healthy transition period,” the company said.
The so-called Pantsgate scandal, in which Lululemon pulled all of its black yoga bottoms in March after deeming the luon fabric to be too thin, claimed Chief Product Officer Sheree Waterson’s job in April.
The company said last week that it is restocking the pants this month, this time with “more fabric across the bum so it’s not stretched from the get-go.”
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The apparel accounted for 17% of the company’s sales, Lululemon said during the initial recall. The bottoms have since been “reengineered” to offer more coverage, the company said.
The brand also said Monday that it is plans to delist from the Toronto Stock Exchange at the close of trading June 24. The low trading volume of its shares “no longer justifies the expenses and administrative efforts associated” with maintaining the listing, the company said.
Lululemon also trades on Nasdaq.
The apparel seller reported earnings Monday for its fiscal first quarter ended May 5. Net income rose slightly to $47.3 million, or 32 cents a share, from $46.6 million, or 32 cents, during the same period a year earlier.
Sales were up 21% to $345.8 million, while same-store sales at locations open at least a year rose 7%.
The company said it expects second-quarter revenue of $340 million to $345 million and earnings per share of 33 cents to 35 cents.
Lululemon made its announcements after markets closed. Its shares closed up 85 cents, or 1%, at $82.28, but tumbled nearly 13% in after-hours trading not long after the disclosures.
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