Lululemon Athletica continues to struggle

Lululemon appears to be coming apart at the seams.

Shares of the embattled yogawear retailer plunged 15 percent, to $37.25, after it slashed its outlook for the year and said its financial chief is retiring.

The warning came a day after Chip Wilson, the retailer’s biggest shareholder and controversial founder, voted to oust the man who replaced him as chairman just a few weeks earlier.

“Our parents are fighting and it’s awkward,” said CEO Laurent Potdevin, recently hired to lead a turnaround. “We’re staying focused, and we’re not going to let us be distracted.”

Nevertheless, signs of a business recovery were scant in the company’s results. Inventory ballooned 23 percent, as shoppers shunned products that weren’t fashionable enough, executives admitted.

Wilson, who owns 28 percent of Lululemon’s shares and still has a board seat, on Wednesday had cited the need to revamp the retailer’s merchandise as he cast his votes against chairman Michael Casey, a former Starbucks executive, and RoAnn Costin.

The board was re-elected Wednesday despite the squabble.

Lululemon got slapped with a product recall last spring after complaints its yoga pants were so sheer they revealed customers’ buttocks when they bent over.

Wilson compounded the mess last fall when he suggested in an interview that the problem was partly the result of some women being too big around the hips.

Scrambling to fix the problem, Lululemon has focused on improving quality at the expense of offering enough new, attractive fashions, Potdevin said.

Lululemon reported a fiscal first-quarter profit of $18.9 million, down from $47.3 million a year ago.

Earnings were hurt by a tax to repatriate foreign earnings to fund a $450 million share repurchase.
Revenue rose 11 percent, to $384.6 million. Sales rose 1 percent.

CFO John Currie, 60, said he is retiring after a seven-year stint so that he can ski more.