Bloomberg News

Lululemon Will No Longer Ban Online Shoppers Who Resell Items

February 19, 2014

Lululemon Athletica Inc. (LULU:US), the yoga-wear maker that recalled pants last year that were too sheer, said it will no longer ban some customers who have resold items of clothing from shopping in its online store.

The retailer came under fire after shoppers complained that the company would no longer ship online orders to some customers who had resold used items on sites such as EBay Inc. (EBAY:US) Lululemon’s online customers only have 14 days after the delivery date to return items, which also must be unworn and have the tags still attached.

Lululemon’s policy was intended to block large amounts of inventory from being bought and resold at higher prices, Therese Hayes, senior vice president of communications and sustainability, wrote in an e-mailed statement today. The company heard last week from unhappy shoppers who were blocked from buying online.

“We looked into it and realized that we had indeed gone too far and have taken steps to fix it as quickly as possible,” Hayes said. “Our approach is simply intended to limit major reselling which results in assortments not being available to all of our guests.”

Lululemon is apologizing to the guests who were affected and has adjusted the language on its website to reflect that it isn’t concerned with people reselling small amounts of items, she said.

This isn’t the first time Lululemon, which in March was forced to recall its most popular line of yoga pants for being too sheer when customers bent over, has run into trouble with customers. The company’s founder, Chip Wilson, apologized in November for comments he made suggesting its products don’t work for some women’s bodies. Wilson said in December that he would step down as chairman before an annual meeting in June.

Quality Checks

Lululemon also is trying regain momentum after sales in the third and fourth quarters were restrained by increased quality checks that delayed delivery of new apparel, including popular seasonal items.

After the latest complaints, Lululemon clarified resale language on its website, Hayes said. The site now says that the company recognizes individuals can do what they wish with products they’ve purchased.

Reselling is something Lululemon will have to monitor because the practice could get out of hand, said Dorothy Lakner, a New York-based analyst with Topeka Capital Markets.

“That’s a problem, people buying things and reselling it,” Lakner said in a phone interview today. “When you buy something, you know the policy.”

She recommends buying the shares.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • LULU
    (lululemon athletica Inc)
    • $54.77 USD
    • 0.37
    • 0.68%
  • EBAY
    (eBay Inc)
    • $57.04 USD
    • -0.06
    • -0.11%
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