Lululemon Athletica Company’s Public Relations

Words: 1514
Topic: Business & Economics
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Abstract

The reputation of a company determines, to a large extent, its profitability and consumer sentiment. Businesses that are alive to this fact tend to observe better care of how they are perceived. Those that fail to work on their image suffer terribly by registering lower sales and recording little, or no growth. In the event of incidences that hurt the company’s standing with the public, speedy and sincere actions are called for to ensure that the firm’s image does not bear the brunt of such occurrences. The need to have a public image that is positive is not monopolized by companies. Individuals also ought to take greater care of their status with others. A tainted reputation could hurt one’s professional and personal life. This is especially true for political leaders and those who are under the constant gaze of the media.

Politicians rocked by scandals could suffer defeat in an election, and such scandals bring into disrepute the office borne by the individual politician. Celebrities such as musicians need to keep a clean record in their interactions with the public. A soiled reputation could lead to infamy and attacks from members of the public, as has been the case with some celebrities lately. This essay examines the public relations efforts of the yoga wear company, Lululemon Athletica. This follows the public uproar following comments made by the company’s leadership (Bhasin 2014). The paper discusses the events that necessitated the subsequent public relations efforts.

It evaluates the success of the public relations policies and procedures used and the theories behind these strategies. The article also relates the tools and practices used by Lululemon to known and widely adopted crisis and issue management policies. The essay concludes by discussing the need for good public relations practices paying particular attention to the strategies employed by Lululemon Athletica.

Lululemon Athletica

In 2013, Lululemon Athletica was confronted with a public relations nightmare. The company found itself in this position after a comment made by its Chairman, Mr Chip Wilson. Mr Wilson issued an apology, and the company recalled 17% of its products that were determined to be defective (Clifford 2013). This paper addresses the failure of the PR actions taken by the company and relates them to crisis management practices.

Mr Wilson issued an apology where he said that he was saddened by his actions (Edwards 2013). The company also implemented a change in its leadership with Mr Wilson stepping down as CEO but maintaining his position as the chairman of the company’s board of directors (Edwards 2013). This was seen as an attempt aimed at cooling the public outrage that followed Mr Wilson’s comments. This act is in keeping with recommended crisis management planning, where the leader leads the charge in repairing damaged reputations. The new leadership has been acclaimed as being alive to the needs of their customers (Ho 2014).

In the wake of complaints from its customers regarding product quality, the company initiated a recall exercise. The customers received a refund and the company allowed for the option of an exchange for other pants (Lustrin & Janis 2014). The public relations theory of corrective action was thus employed in an attempt to reverse the damage done by dealing with the cause of the crisis. This effort was hampered by the customer complaints of difficulty in securing refunds.

The strategies used by Lululemon have been largely unsuccessful. In early 2014, the company registered disappointing performance (Berg 2014). The company’s stocks on the NASDAQ traded at a two-year low (Berg 2014). The poor performance was fuelled by the intensely negative media coverage of Lululemon. The media exploited the framing effect of the press, where events of little significance are compounded. This highlights the sweeping powers the press exercises over public thought and perceptions. The comments by the company’s then CEO, Mr Wilson, infuriated women and led to a boycott of the company’s products. Lululemon Athletica has had to deal with shaky investor confidence. The company’s stock has been underperforming, recording a 17% slump in value (Berg 2014).

The company’s shareholders filed a lawsuit against the company’s leadership alleging that the company failed to reveal the defects (Reuters 2014). Corrective action by the company’s leadership could mitigate the effects of the crisis. Addressing the entry of the defective measures could have prevented the lack of investor confidence.

The company’s efforts have failed to deliver the results hoped for as competitors have moved in to capitalize on the blunders. The company had to recall 17% of its products that were found to be defective (Clifford 2013). The company was forced to consider entry into other markets that it did not previously serve.

The company’s efforts have been met by a response from tabloids that paint the company in a negative light (Peterson 2013). The shareholders question the ability of the leadership to steer the company towards profitability and improve the company’s image. Given the failure of the company to address this matter, it becomes clear that the company does not accord this situation due to attention. Situational theory suggests the need to identify a problem in a good time and try to resolve it before it deteriorates. At a shareholder’s conference, the CEO was accused of failing to uphold the company’s ideals (Peterson 2013).

Mr Wilson issued an apology that was posted online. However, the apology was viewed as insincere and failed to address the customers who had been offended by his remarks. Mr Wilson’s apology was received with angry comments on social media, and he was insulted (Lustrin & Janis 2014). In the apology, the chairman failed to mention his wrongdoing and instead used the opportunity to rally the company’s employees, urging them to maintain their culture.

The company’s reputation suffered mainly due to the framing effects of the media. The company had a record of delivering quality products and was among the leaders in the yoga wear industry. Before the scandalous incidents, the company enjoyed positive customer sentiment and had an extensive customer base. However, following the remarks by the company’s chairman, the company’s image was plunged into a state of virtual irreparability. This incident highlights the framing theory, which points to the media’s power of influencing and defining public opinion (Chong & Druckman 2007). Lululemon also resorted to applying this theory to reverse the damage that the negative publicity had done to its reputation. The company released statements and embarked on campaigns to restore investor and customer confidence, including a presentation in 2014 for its shareholders (Peterson 2013).

The decision by the company, through its chairman, to issue an apology for the remarks, is in keeping with widely practised crisis management planning. It is recommended that the leadership be at the forefront of repairing a company’s image and rally the rest of the team towards this course (Bernstein 2011). Bernstein addresses the need for a company to exploit all avenues when building its reputation. Even though the apology only served to inflame an already volatile situation, its execution would have been effective had it carried a different and better message.

As a corrective action, Lululemon recalled its defective products. This is in keeping with the practice in other industries such as a car doing businesses, where faulty vehicles are recalled for repairs or exchanged for other vehicles. Corrective action as a principle in public relations requires that individuals and companies move to address the matter that initiated the crisis in the first place. The management of Lululemon realized the damage that the news of its defective products was doing to its image in good time and intervened with the recall. Even though the recall proved to be costly (Clifford 2013), the gesture indicates the value placed on the standard of their products.

Lululemon employed the practice advocated for by the situational theory of publics that calls for an analysis of the problem and take appropriate action. The theory requires individuals and organizations to assess the level of their involvement in the problem and act accordingly. The crisis that engulfed Lululemon was at the heart of its operations. The company realized this and intervened with measures that have borne some fruit. The company’s action identifies it as active publics (Grunig 2013).

Sound and effective public relations efforts that factor in the framing effects of the press, situational and crisis management planning theories, among others, have immense benefits. Companies and individuals are able to enjoy favourable public perception. This drives demand for the company’s products and allows for reach to larger masses. Public relations create credibility and allow a company to exercise an edge over competitors who fail to employ the tool efficiently (LawriMore Communications 2014).

In conclusion, Lululemon is set for continued growth with its expansion into other markets. Even though the measures implemented so far to mitigate the effects of the negative publicity the company has received been unsuccessful, analysts predict that the company is poised for success. Its share price has been predicted to revamp in the future, owing to the company’s long history of delivering products that deliver consumer satisfaction and value for money.

Reference List

Berg, D 2014, ‘Lululemon scrambles to reverse its bad PR’, Advertizing Age. Web.

Bernstein, J 2011, Manager’s Guide to Crisis Management, McGraw Hill Professional, New York. Web.

Chong, D, & Druckman, N 2007, Framing Theory, Northwestern University Press, Evanston. Web.

Clifford, S 2013, ‘Recall is expensive setback for maker of yoga pants‘, The New York Times. Web.

Edwards, A 2013, ‘Lululemon CEO steps down after blaming women‘s fat thighs for ‘making his brand’s yoga pants see-through’, Daily Mail. Web.

Grunig, E 2013, Excellence in Public Relations and Communication Management, Routledge, London. Web.

Ho, P 2014, Lululemon shares slump on lack of guidance. Web.

LawriMore Communications 2014, Benefits of Public Relations. Web.

Lustrin, M, & Janis, L 2014, ‘Is Lululemon Chairman’s Apology the Worst Ever’, ABC News. Web.

Peterson, H 2013, ‘8 Outrageous Remarks by Lululemon Founder Chip Wilson’, Business Insider. Web.

Reuters 2014, ‘Lululemon Officials Won’t Face Fraud Charges‘, The New York Times. Web.