Lululemon discharges Chief Product Officer and makes organisational changes

Lululemon discharges Chief Product Officer and makes organisational changes

Textile future reported recently the business results of Canadian Lululemon (yoga inspired athletic clothing) as well as the circumstances that there were quality problems in the production of its black luoon pants

In consequence these defective pants had to be taken off the shelves and new quality criteria have been established. Now the Chief Product Officer since 2008, Sheree Waterson has been discharged and will leave the company by April 15, 2013. The leave was dryly commented by CEO Christine Day: “We appreciate the many contributions that Sheree made during her time with lululemon, particularly in the area of design”

Lululemon has evaluated quickly and unmasked the deficiency in its black luon production and the company concluded that the current specification and testing protocols for the signature fabric luon dating back to 2006 have not materially changed. However, production of luon is, as stated before, a complex process with a number of different inputs, and fabric is the key factor. While the fabric involved may have met testing standards, it was on the low end of lululemon’s tolerance scale. Therefore the testing protocols were incomplete for some of the variables in fabric characteristics. When combined with subtle style changes in pattern, the resulting end product had an unacceptable level of sheerness.

The company had taken steps prior to the black luon issue to bolster its internal product expertise, including the addition of senior level capabilities  in quality, raw materials and production . The new team was instrumental in determining the root cause of the issue and has initiated work streams and actions to address what was contribution the causes. New rigorous testing and quality processes have been implemented including revised specifications for modulus (stretch), weight and tolerance. Further lululemon employees have been stationed in factories to monitor and test products and they will also educate internal teams and manufacturing partners on new testing standards and methodologies. In addition, the company is building a stronger internal structure with new leadership and cross-functional team capability in order to create a more robust organisation to support the long term growth strategy.

CEO Christine Day underlines “Our stand for differentiation is the quality of our product. We have been building capacity in product organisation, and we recognise that continued investment in this segment of the business i required to support our future. And she added “We are committed to continually developing best in class fabrics, and are committed to only putting products in our stores meeting our stringent standards”.

 Virginia’s Reflections

The way Christine Day handled this deficient product case is asking for applaude and it reflects also the straight forward manner of the CEO. She immediately thought to find the cause of the deficient production, she communicated openly that the product was taken of the stores’ shelves and that it will be costly to remedy this case. At the same time she initiated organisational changes and installed a professional new team to stipulate the right answers and to initiate new quality standards also suppliers have to meet. She further realised what damage this could do to the company and the distrust that could grow among the customers. In order to re-establish immediate trust, she communicated openly – after analysing and finding the cause – and in public. She also discharged the Chief Product Officer, and her words of appreciation lead to the conclusion that Sheree Waterson has tremendous design potential but was not fulfilling her position in view to all the responsibilities assigned. TextileFutre thinks that Christine Day has acted in a manner that should be expected from a CEO in any company and under similar circumstances. Christine Day is the master mind behind the tremendous success of the company and her ways of communication – internally and externally – are always straight forward and give a good example to the trade! She lives what she believes in, and this very successfully!

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