Lululemon Athletica Inc. said its chief product officer, Sheree Waterson, would leave as part of a reorganization aimed at tightening up processes that led to a recall of black Luon pants deemed to be too sheer.

This story first appeared in the April 4, 2013 issue of WWD. Subscribe Today.

The Vancouver-based firm said last month the misstep would cost it up to $67 million in lost sales.
Lululemon said its review of the mishap found product specifications and testing protocols for its signature Luon had not materially changed since 2006.

“However, production of Luon is a complex process with a number of different inputs, and fabric is the key factor,” the yoga apparel firm said Wednesday. “While the fabric involved may have met testing standards, it was on the low end of Lululemon’s tolerance scale, and we have found that our testing protocols were incomplete for some of the variables in fabric characteristics. When combined with subtle style changes in pattern, the resulting end product had an unacceptable level of sheerness.”

Before the see-through dustup, which made for a round of embarrassing headlines for Lululemon, the company had set up a new team with expertise in the areas of “quality, raw materials and production.”
That group initiated three “work streams” to address the issue.

Accordingly, the company is more rigorously testing its Luon products, has its own employees stationed in factories and is building what it described as a “stronger internal structure.”

“Our stand for differentiation is the quality of our product,” said Christine Day, chief executive officer. “We have been building capacity in the product organization, and we recognize that continued investment in this segment of the business is required to support our future.”

Waterson will depart as of April 15 after nearly five years with the firm. Before joining Lululemon, she was president of Speedo North America.