Chip Wilson started an interesting business back in 1998, bringing new materials to the yoga scene when he founded lululemon athletica (NASDAQ:LULU). Now, twenty-five years later, he's leaving the business in shame after a rash of insulting statements and quality issues brought Lululemon down through a hectic 2013. The company announced his departure and the hiring of Laurent Potdevin as the successor to CEO Christine Day yesterday .
Lululemon's quality issues
Day announced her retirement from the business earlier in the year, saying that she would step down once a suitable replacement had been found. The news was music to many Lululemon devotees' ears, as Day had overseen the hard part of the business's growing years. That lead to what some saw as an increasing focus on profitability at the expense of quality and community.
Those quality issues were on full display earlier this year, when Lululemon was forced to recall many of its pants because the fabric they were made of became sheer when stretched. The company initially estimated that the shortage would result in a $57 million to $67 million hit on revenue . Three months after the quality issues came to light, Day announced that she was stepping down.
The company then went on to try and fix its quality issues, launching new, thicker fabrics along the way. The estimated revenue impact from earlier in the year started to shrink, and the business looked like it was back on the up and up. Enter pilling.
Last month, new customer complaints surfaced regarding the company's relaunched pants, with people complaining that the product pilled -- built up those little rice-shaped balls of fabric. The company said that the issues did not appear to be widespread, but because of the earlier problems, the complaints wouldn't die.
Wilson then got in the game, telling Bloomberg TV that, essentially, Lululemon pants weren't meant for you if your thighs rubbed . A soulful apology came as too little, too late, and the damage was done. Now, a month later, Wilson is on the way out.
Lululemon's management team
Throughout the year, Lululemon has been shedding management members. Day stepped down, the chief product officer left after the fabric fiasco, and the senior vice-president of sourcing changed, as did the vice-president of distribution and logistics . In that long line of changes, Wilson's departure from the board is almost a footnote, and should have less impact on the company's operation and more impact on its brand.
Day's replacement, on the other hand, is going to make a big splash. Laurent Potdevin comes from TOMS shoes, where he was the company's president . He was in that position for just under three years, having been hired by TOMS founder Blake Mycoskie . Before that, Potdevin was the CEO of Burton for five years, capping a fifteen year run with the snowboarding company. The combination of his strong community-centered brand experience from TOMS and his athletic retail experience at Burton make him an excellent fit for the role of CEO, and his hiring could be a meaningful turning point for Lululemon as it heads into 2014.
Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.