Companies with lofty social missions and ideals are nothing to underestimate these days -- look at Whole Foods Market
lululemon's stock was down about 8% earlier today after independent testing of its VitaSea apparel revealed rather inflammatory findings. VitaSea clothes are supposed to consist of 24% seaweed fiber -- which supposedly includes anti-stress, anti-bacterial, anti-inflammatory, and detoxifying properties along with vitamins and minerals that can be absorbed into wearers' skin. However, The New York Times reported tests showing VitaSea has no significant differences in mineral levels compared to run-of-the-mill cotton. Ouch.
Lululemon has focused on health, wellness, and a positive attitude. However, the company could lose crucial credibility because of this seaweed fiasco. The people lululemon targets often distrust traditional marketing, so the perception that this company is simply trying to capitalize on hot trends without living up to them could be a serious misstep.
Despite the enthusiasm for lululemon since its IPO, I didn't see how many Wall Street types seemed not to perceive much, if any, competition in this area. I have yoga pants from Urban Outfitters'
Some trendy companies have experienced long-standing stock price momentum -- ponder Crocs'