Reverse Namaste: Lululemon Is Freezing Out Some Loyal Customers

Source: http://www.flickr.com/photos/northhills/

Source: http://www.flickr.com/photos/northhills/

A quick perusal of Lululemon’s (NASDAQ:LULU) recent shares activity would make one assume that the popular athletic clothing company is on its way back to the top, despite suffering an embarrassing summer of 2013. After plunging 43 percent after a 52-week high, shares of Lululemon were rising again in morning trading Tuesday, up 1.63 percent, sitting at $51.88 as of 10:30 a.m. This recent activity has been pleasing to investors; however, not all of the company’s customers are as happy as its traders. According to CBS News, Lululemon now has some unhappy consumers on its hands thanks to company representatives’ efforts to forbid customers from reselling their clothes, and even going so far as to lock them out of the company’s online store.

Lululemon believes that many of its customers have been buying products and reselling them at a higher price online — an activity that CBS News reports is likely legal — and the company is so adamant about forbidding the practice that it has taken to contacting its customers directly, accusing them, or simply blocking them from buying online if company representatives see a clear pattern of buying and reselling. Though it is understandable why Lululemon would find this practice frustrating, the company’s response to it has surprised onlookers, as it now appears as though the struggling athletic apparel giant is antagonizing the loyal customers that once kept its business afloat in the first place.

CTV News highlights the case of one Lululemon loyalist who was contacted after he tried to sell a pair of Lululemon pants that didn’t fit him on eBay. Despite Eric Lewis’s collection of 35 pairs of Lululemon shorts, a company representative told him that Lululemon would no longer be shipping to him. He said to CTV News, “I just kind of felt victimized. I’m such a loyal fan I’ve supported their business for a long time and then for them to go after me for something like this just blew my mind. I was shocked.”

It’s clear that Lululemon’s PR game could use some work, especially because its latest recall debacles require patience from its consumers, who might we add, are paying a pretty penny for their clothing. The year 2013 was one of see-through leggings for Lululemon, and as highlighted by CBS News, the company was forced to recall 17 percent of its yoga pants last Spring after consumers complained that the clothing turned transparent when the nylon-and-lycra fabric blend grew thin. Then, Lululemon reformulated its fabric, only to have customers say that the new pants were piling. Seems petty, but when you’re paying $98 for a pair, it’s fair that consumers are asking to get what they pay for. Luckily, Lululemon founder Chip Wilson shifted the attention to him when he blamed the product’s problems on women’s fat thighs. Smooth. It hasn’t exactly been smooth sailing since then.

Coming off several bad months, Lululemon executives attempted to increase the company’s appeal to customers once again, and now more than six months later, just when it seemed as though Luluemon was back in the saddle, it is becoming clear that the company is still pushing its limits. After such a significant stock drop, one would think that the company would be treading lightly as its shares finally gain momentum again, but instead, Lululemon is calling out its loyal consumers, and that may end up coming back to haunt them.

More From Wall St. Cheat Sheet: