Lululemon is just not having a good year. Remember the sheer yoga pants debacle? A shareholder has now filed a suit in Manhattan claiming the company defrauded “shareholders by hiding defects in yoga pants whose sheerness led to a costly recall, and concealing talks that led to the sudden departure of its chief executive,” according to Reuters (via Business Insider).
The retailer, whose CEO Christine Day recently quit, had to recall 17 percent of its pants in March for being too sheer. The company estimates it could cost them $40 million in profits. But Lululemon says its not their fault and blames the defect on a supply chain error.
There was another lawsuit filed in May alleging that Lululemon boosted executive pay just before going public with the recall. Thank goodness the company has a sense of humor.