Lululemon

Silent video introducing CEO symbolizes new chapter for Lululemon

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“Let’s face it, we have had lots of PR issues this year.”

That’s a quote from Lululemon CFO John Currie during a call with analysts amid a tanking stock price in December 2013. Mr. Currie was absolutely right.

The PR nightmare began last March when the company was forced to recall a line of its yoga pants after customers complained they were see-through. It continued with the departure of then-CEO Christine Day in June, accompanied by this scathing Huffington Post article in which a former employee bashed the brand for discriminating against customers who wore larger sizes.

The grand finale (cue the drum roll) came in November when founder Chip Wilson stated that Lululemon yoga pants “don’t work for some women’s bodies” in an interview with Bloomberg, adding “it’s really about the rubbing through the thighs.”

Let’s all give Mr. Wilson a round of applause for alienating a sizeable chunk of his customer base with a few choice words, sending the company’s stock value into a plummet that has yet to reach its bottom. Wilson is in the midst of his ride off into the sunset, announcing in December that he’ll step down as chairman in spring 2014.

Needless to say, the PR team at Lululemon is facing a tough set of challenges this year. How do we regain the trust of the investment community? How do we prove we’ve learned from our mistakes and are moving on? How do we heal the deep wounds caused by misguided leadership decisions? How do we resuscitate our brand?

If the introduction of new CEO Laurent Potdevin by way of a silent YouTube video posted to the company’s channel is our first glimpse into the “new” Lululemon, I like it. I believe it was an effective tactic for a few reasons.

First, there’s power in silence. Talking was what got Lululemon into trouble, so using a video sans-sound is quite prophetic. If I were leading the PR team, my strategy would be to develop activities that clearly showed our customers and investors that we learned from our mistakes and we’re ready to listen. I think Lululemon accomplished this to a degree with Potdevin’s video. Abercrombie & Fitch, who faced a similar PR crisis in 2013, responded with a Facebook advertising campaign that made no mention of the company’s mistakes. The result? More than 500 negative comments from enraged customers. Ouch.

The team at Lululemon responsible for the video also deserves credit for effectively telling Potdevin’s story without words. A Burton snowboard and a “pray for snow” hat symbolize his former post as CEO of Burton, and a shot of him slipping off his TOMS reminds viewers he championed the company that gives shoes to those in need. If I were a Lululemon shareholder, I’d be encouraged by Potdevin’s track record with strong brands and his background in and passion for the athletic apparel market. When a company introduces a new leader, the audience needs reassurance of his or her ability to do the job better than its been done before.

Lululemon nailed it by taking a risk and letting stakeholders know- literally and figuratively- they’re ready for the next chapter to begin. I applaud the company’s unusual, attention-grabbing tactic to shift attention away from the “old Lululemon” to its promising future. In order to right the ship, Lululemon needed dramatic communication to its stakeholders to say “this is the new us,” which it accomplished with the Potdevin video.

We won’t know for sure whether this tactic was effective or not until March 20, when Lululemon reports its annual earnings. In my opinion, it was a smart move in moving the company forward. Take it from this amateur investor: Lululemon is a smart buy low stock.

Like this post? Check out Tim Human’s article on the video in IR Magazine.