Yesterday, March 19, Canadian athletic apparel company Lululemon yanked one of its most popular items, black yoga pants, from shelves after discovering that the material was too sheer and revealing too much of its customers, according to published reports. Lululemon's stock took a hit, dropping almost 5 percent in morning trading, and highlighted the need for quality control.
While a large company with a cult-like following like Lululemon should be able to bounce back from this, small businesses would be hard-pressed to claw their way back if a flagship product failed to live up to quality standards. As it is now, Lululemon's shares are downgraded to "neutral," and analysts advise taking a "wait and see" approach to investing. But the demand for Lululemon yoga pants is still there, analysts said in published reports.
Part of the problem lies in the manufacturing. The "Luon" yoga pants are made in Asia, which faces quality control problems. Small businesses and entrepreneurs would be wise to choose manufacturing companies for their products that have a reputation for quality products.