In Lululemon’s view, customers simply weren’t wearing their new leggings right. If they just sized up, and then pulled on seamless, skin-toned underwear before slipping into their $108-a-pair “Get Low” tights, they’d discover they could in fact get low without revealing too much.
That’s the message Chief Brand and Product Activation Officer Nikki Neuburger gave hundreds of employees at a meeting last week. Staff at Lululemon Athletica Inc.’s headquarters in Vancouver and on video from around the world had gathered to hear what executives had planned for 2026. But first, they were hearing about yet another crisis, this time over leggings that buyers had complained were see-through and “not squat proof.”
“Honestly, that’s a joke,” said Neil Saunders, managing director of GlobalData. “You are selling a premium product, you shouldn’t have to issue instructions to women on how to wear leggings because your product is defective.”
It was just the latest of Lululemon’s self-inflicted wounds. In the last few years, the company has drifted away from focusing on its core customer — yoga and fitness enthusiasts in search of high-quality basics — in favor of jumping on trends and getting products to market quickly. Customers struggled to make sense of collaborations with brands as disparate as Disney and Erewhon. Attempts to get into personal care products and a $500 million foray into fitness equipment flopped.
Lululemon has “chipped away” at what made it special, said Simeon Siegel, a senior managing director at Guggenheim Securities. “Their core customers — their early adopters — likely feel disenfranchised,” he said. “It is no longer the early Lulu that they came to love.”
Even Lululemon’s approach to its iconic yoga pants — the item that effectively created athleisure — has been haphazard. With trendy upstarts like Alo Yoga and Vuori winning over influencers and Gen Z, Lululemon tried to do the same, debuting pants and tops in brighter colors and with bigger logos that ended up on sale racks. At the same time, its stores feel dated with leggings displayed on the pant wall that it has had for over a decade, said one investor, asking not to be identified in order to speak freely about the company.
Lululemon’s shares have dropped around 65% since hitting a record high in 2023. The company is expected to report its lowest annual sales growth since it went public almost two decades ago. Chief Executive Officer Calvin McDonald is leaving his post this week, with no permanent successor in place. Activist investor Elliott Investment Management has taken a more than $1 billion stake; retail veteran and former Ralph Lauren executive Jane Nielsen is its preferred candidate for the CEO job, according to a person familiar with the matter.
Chip Wilson, Lululemon’s founder and one of its biggest shareholders, has also launched a full-scale activist battle and has made known his ideas about how the company should be run. After months of publicly airing his grievances, he nominated three directors to Lululemon’s board. He is considering creating a website that will have additional details on his directors of choice, as part of his effort to win shareholder votes, according to a person familiar with his plans.
Lululemon is focused on “continuing to execute against our action plan,” a spokesperson wrote in an emailed statement. The company is on track to meet targets for new styles and is “confident in the strength of our leadership team.”
McDonald, the CEO, has blamed poor performance on relying too much on core franchises, not having the right mix of new and old styles and using the “same product playbook across certain categories for too long,” he said on a call with analysts last year. Earlier this month, the company said fourth-quarter sales were likely to come at the higher end of its guidance in a sign of a strong holiday showing.
In a Jan. 26 note, analysts from Telsey Advisory Group wrote that at a meeting last week, Lululemon’s management reassured them that the company has shortened its design process and is focused on the right mix of established and new products going forward.
Lululemon’s dilemma is familiar to many companies that have grown rapidly and need to find ways to keep expanding while competitors encroach, analysts say.
“That’s a very natural phenomenon,” said GlobalData’s Saunders. Those that successfully navigate that inflection point double down on quality and keeping products fresh for consumers, he said.
“Lululemon did the complete opposite of that,” Saunders said. “They’ve gone from being the leader in the category to, honestly, a bit of a follower.”
The “Get Low” debacle stressed just how far Lululemon has strayed to everyone from investors to consumers. Jess Mabie, an Arkansas-based content creator who can earn a commission from posting Lululemon links, said she was thinking of getting the new leggings. Commenters warned her that they were see-through and didn’t fit well.
Days after they went on sale, the company pulled them from its website, which sent Lululemon’s shares tumbling.
“I’m questioning whether the company’s mission and quality still hold up,” Mabie said.
As Lululemon fielded pressure from growing competition and a slowing athleisure market, the culture inside the company was also shifting, according to former employees. Meetings had commonly kicked off with a ritual known internally as a clearing, where participants were invited to breathe, think and offload anything on their mind before getting to business. As things sped up, clearings were less frequent, those ex-employees said.
The company’s directive had become: move faster. In the past couple of years, executives have talked about “fast-tracking” new styles and speeding up design on earnings calls, and late last year the chief financial officer said Lululemon was working on reducing its product development process to 12 to 14 months, from 18 to 24 months.
Under McDonald, who’s led Lululemon since 2018, the company made a series of bets that flamed out. It launched a personal-care line in 2019, but those products, like the Sweat Reset Face Moisturizer, don’t appear to be for sale on Lululemon’s website. And a $500 million deal to acquire in-home fitness equipment company Mirror at the height of the Covid-19 pandemic unraveled after just three years when Lululemon discontinued sales of the device.
Rivals were finding success selling trendy sets with campaigns fronted by the likes of Kendall Jenner. Meanwhile, Lululemon launched a collaboration with Walt Disney Co., where McDonald sits on the board, which was trashed by social media users for being “a random collab” and “basic AF”. Lululemon said it was pleased with the performance.
The company was, at the same time, fumbling the quality basics it was once known for. In 2024, it pulled “Breezethrough” workout leggings off the market after customers criticized stitching around the waistband and butt that created a “whale tail” effect like thong underwear. McDonald acknowledged the misstep on a call with investors. Then, last year, its best-selling black leggings began piling up at outlet stores — a sign that even some core products weren’t selling well.
Still, during his tenure, McDonald grew Lululemon’s revenue more than three times into a more than $10 billion business. That included a particularly strong presence in China. He also got Lululemon into shoes.
But then, there was “Get Low” — a leggings scandal eerily reminiscent to one that’s hung over the company for more than a decade.
In 2013, Lululemon recalled many of its black yoga pants because customers complained they were see-through. When it brought them back, it was with now-familiar messaging: customers should work with an in-store educator — Lululemon’s term for sales associates — to make sure they were buying the right size. Soon after, the then-CEO resigned, and founder Wilson fanned the flames by claiming that “quite frankly, some women’s bodies just actually don’t work” in Lululemon products. He stepped down as chairman later that year.
Now, Lululemon is again leaning into customer education. Days after “Get Low” merchandise was pulled from the website, it put the leggings back on sale online, this time with added directions: size up and wear skin-tone, seamless underwear. (It has since tweaked that language to only recommend “neutral-toned underwear” and to avoid high-contrast colors.)
In some cases, education isn’t enough. Amore Prince, a 27-year-old social worker, has about 30 of the brand’s workout jackets and stops into her local Lafayette, Louisiana, store about once a week. When she went in last week, the sales associates encouraged her to try the new “Get Low” leggings. At first, she liked the feel of them. But when she turned around, she saw they were see-through.
The staff encouraged her to try on a larger size with a different top, but Prince couldn’t shake her initial reaction. “I do love the brand,” she said. “But this is just one of those items that just doesn’t work.”
Lululemon’s problems are now without a permanent leader to solve them. The company will soon be led by Meghan Frank, its chief financial officer, and André Maestrini, the chief commercial officer, but the retailer is interviewing for someone to take the helm from them.
Nielsen, Elliott’s preferred candidate, also worked at Coach and is seen as an accomplished turnaround specialist.
Founder Wilson, for his part, has criticized Lululemon’s board for prioritizing “finance CEOs who can ‘speak Wall Street’” over a “product-driven” leader. He’s pushing for an overhaul of the board before the company picks a new chief.
At the meeting last week, Chief Brand and Product Activation Officer Neuburger didn’t dwell too long on “Get Low.” The message to staff was to focus on performance, and to keep in mind the company’s latest muse, an inspirational character known as the “mindful athlete.”
“They are energetic, highly social and expect high quality products that deliver both performance and style,” the company said. Not specified: Whether they’re the type of person who wants instructions on how to wear leggings.
Meier and Katgara write for Bloomberg.
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