TODAY   |  June 13, 2013

What Lululemon CEO’s resignation means for the brand

Lululemon, the popular yoga and fitness brand, had another challenge this week with the announcement that the CEO is resigning in the wake of the controversy over too-sheer pants. TODAY’s Matt Lauer reports and retail analyst Dana Telsey discusses the future of the brand.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> now has the it company of exercise apparel lost its mojo? lululemon has faced its share of challenges this year, and now the ceo that helped build the brand is voluntarily stepping down. they're known as lululemons, beloved by yoga and fitness enthusiasts across the country, including our own hoda kotb .

>> i love lululemons. nothing makes you feel thinner than a pair of lululemons.

>> when it was announced the company's chief executive officer christine day announced she'd be stepping down for personal reasons, the stock prices tumbled by 17%.

>> lululemon was force ds to pull its brand from stores and websites thanks to complaints by customers of a too sheer bottom that left little to the imagination. now the company is stretched thin as well, forced to face a future without its popular leader and wondering if consumers will still be willing to stretch their wallets with a high end brand. what will the change in lululemon mean for the brand and for consumers? dana telsey is a retail analyst. good to see you.

>> good to see you.

>> this was a top brand over the last couple of years, and now if you're a consumer and you love this stuff, you're watching real problems at the company. does that matter to consumers at all?

>> no, it's about the product. it's about the product, having it in stock, having new categories to expand into, and it's still working.

>> i was watching, after the whole see-through debacle, the company stabilized. it did real well. the stock seemed to stabilize. i know that women, for example, standing in a store waiting to buy some yoga pants don't care about a stock price . i want to show you what happened to this stock over the course of a day or two. it plummeted after the announcement that the ceo was leaving. it lost about 17% or 18% of its value. what's the reason for that if the consumers are still liking the products?

>> christine day has done a terrific job building sales, building earnings. you've had a ceo who's in place from '05 to '08 who's responsible for taking the company public. christine built the identity, had competent consumers come in to build the dna. next up, global growth. different skill set for global growth versus building a brand.

>> what do they need to do right now to stop the plummet and to make sure consumers still line up at the cash register .

>> get the black luon pants in, and customers will be buying.