Thursday, April 13, 2017

Chip Wilson forced to step down from Lululemon

each store bag will have these quotes on it and more
Lululemon is known today as a trendy athletic company that provides pricey clothing that thousands of men and women want to be seen wearing. They may say it is comfortable, which is fair, but it also shows that you are apart of the tight knit lulu club and you most likely have been buying only lulu workout clothes since your first purchase. Chip Wilson is the founder of this brand. Chip Wilson wanted to create an environment where people could not only work out, but to form a community centered athletic environment where people could learn about living healthy. He wanted a business that created real relationships with their customers, to help them find exactly what they are looking for and to celebrate their goals. With that said, in the past few years, Wilson has continued to go against his public goal of a comfortable and respecting environment, resulting in him to be forced to step down from the company.

 Without question, Lululemon has definitely spread positive vibes to their customers. People do complain about the price of their products, to give an example, their average legging price is $98, however, I will say, the quality is high. On every bag you get from purchasing something, the bag is covered in positive messages, which are placed around most stores as well. So, for the founder to be caught making nasty and degrading comments about how “some women's bodies just don't actually work for it” meaning his brand, or about him favoring child labor in third world countries, or that he created the name Lululemon because he “thought it was funny that Japanese people couldn’t pronounce the letter L” and that it was “funny to watch them try and say it”, and one of the biggest complaints is that the company does not make a size over 12. Wilson said “It’s a money loser, for sure”. This is apparently due to the extra fabric that would be needed to create larger sizes. Their sizes however are much smaller than the average size, so for example, in a GAP jean, which I feel is a very average reliable clothing store, I would wear a size 2, which would be about a 26 inch waist, on the website of lululemon, their size chart would tell me I am in between a size 4 and a size 6 for their leggings. So, generally most women go up a size or two in their leggings because of how tight they are. So when they only go up to a size 12, that's eliminating more women than initially thought. It most likely is eliminating anyone who generally wears a size 10 and up. 

Chip Wilson, founder of lululemon
According to Individualist Theory, a business is acting within ethical standards when it makes profit for its stockholders, but also respecting human rights. They also respect people's right to pursue their choices so we can all live in the way we want. It is important with an Individualism theory in mind, to maximize profit. It is the direct goal of a business to profit, and the primary obligation of the business person is to maximize profit. So, according to the Lululemon case, Chip Wilson is trying to maximize profit for his company but only making a limited amount of sizes, and refusing to lower his prices because he sees the consumer will pay for them at that price. As to the nasty and unethical comments he made, this would be going against human rights of being respected. He is demoralizing those who he feels are “unfit to wear his clothes”. 
According to Utilitarianism, an action is deemed ethical if it promotes all around happiness to all parties affected. If the happiness outweighs the bad. Happiness is the only thing of intrinsic value according to a Utilitarian way of thinking. In this case, lululemon tries to promote happiness, but the unethical comments by Chip Wilson do not promote happiness at all, and most definitely the bad outweighs the good. His comments were racist to Japanese people, they put down women of larger stature, and they refuse to make larger sizes to accommodate a wider variety of customers. I do not believe Wilson intentionally wanted to hurt anyone directly, I just truly believe he is unaware of his surroundings and how his words are being interpreted by others. What he thought was a harmless joke, is taken to heart to others. For this reason, I think it was a good choice to have him step down and have someone with more self control be part in charge. The company could not afford another bad comment publicized. 
Kantianism is based on four basic principles. To act rationally, to allow people to help to make rational decisions, to respect people, respect their autonomy, and individual needs and be motivated by good will, seeking to do what is right because it is right. Chip Wilson, most definitely would not be deemed ethical according to a Kantian point of view. He does not act rationally or think about what he is saying or doing at all. He never told his employees about anything he was going to say to the press, or have them in on many of his business deals. He also did not respect people, like I said before he was racist and degrading to women. It wouldn’t be fair to say he did not do things seeking to do what is right, because his initial goal of creating lululemon is extremely positive and has motivated a lot of people to invest in yoga and living a healthy life. 
And lastly, according to Virtue Theory. Virtue theory in business is based off of 4 main theories, courage, honesty, temperance and justice. For this case, Chip Wilson definitely had courage in risk taking to start this athletic company different than any other company at the time. Lululemon is still today one of the top yoga clothing and equipment companies. But he lacks the courage to take a stand for the right ideas and actions. In his defense, he most likely thinks he is making good decisions, but from an outsider's standpoint he is not. As far as honesty goes in regards to his agreements, hiring and treatment of employees, customers and other companies, he definitely lacks that as well. He does have a high reputation of treated his employees well, however his comments being published do not reflect well on how he would treat customers if he was in the store. Since then, Lululemon has been publicly bashed on facebook for the employees making the customers feel uncomfortable. Temperance is the “reasonable expectations and desires”(Soloman 34). Wilson created a brand so well liked that he can charge a high price for every product and has always been successful. He was hardworking in creating this business, with quality products, good ideas and for the most part fair practices. I believe according to Virtue Theory Wilson made poor decisions that were not fair, but his company should not have to suffer for those. The company is prided on trying to create a healthy and happy life for people.  

Laurent Potdevin, new CEO
Stakeholders have a lot to say about this scandal. Stakeholders are anyone that is in any way affected by the actions of the company. In this case some top stakeholders would be, the upper management, the supervisors, customers, stockholders, and employees. Upper management was directly affected by this scandal because they had to make a decision on what they think the best action is to ensure their company does not fall drastically. They ultimately ended up having Wilson step down, to minimize the publicity or legal battles of wanting to fire him, and they brought in a new CEO. They brought in Christine Day who stepped down in 2013, and now their current CEO is Laurent Potdevin. Christine Day stepped down due to “personal reasons” and “declined to explain the specific reason for her departure”(Bhasin). From there, the company knew they needed someone with a good track record that could help stabilize this company. Laurent Potdevin was brought in, who started his career working at LVMH Moet Hennessy-Louis Vuitton, “which sells luxury goods such as perfumes, cosmetics, jewelry, and handbags, as well as wines and spirits”(O’Reilly). He then worked for Burton Snowboards for 15 years, where he had many different jobs, including director of operations and chief operating officer, CEO and president from 2005 to 2010. An investor relations report from Lululemon Athletica, “The business grew significantly under his leadership, expanding across product categories and creating international scale by always focusing on providing the best consumer experience.”. This was a large motivator in Potdevin being brought in as CEO for lululemon. All of the things he did for Burton, is exactly what Lulu needs to be implemented in their company right now. Potdevin was the president of TOMS shoes after working for Burton, which has had one of the best marketing campaigns out there. TOMS is a “charity-focused shoe company that donates a pair of new shoes to a less-fortunate child when a customer purchases a pair of TOMS shoes”(O’Reilly). TOMS has had create success, and I truly believe Lululemon needs a new marketing campaign, to get the bad taste of their past actions out of consumers mouths.  
From any point of view, Chip Wilson has acted unethically in all aspects. His actions were deemed for being fired, and I think it was a respectable move to have him step down on his own to respect his name. Laurent Potdevin is the new CEO of lululemon and I believe him and his team need to come up with an action plan to re market Lulu as a whole. This would cause new customers to come in, and old customers to feel better about coming back and giving their money to this company. An action plan for Lululemon could look something like this,

Action Plan:
  1. The current issue is to get lululemon their respectful and motivating reputation restored. Chip Wilson has caused many customers to leave lululemon because they don’t want to give their money to an establishment that is making people feel bad about themselves. It is also driving away others who weren’t customers ever and now don’t want to ever shop there. To resolve this, lululemon needs to really focus on promoting themselves in a positive way to encourage people this is not how they want their company to be known for. I think the biggest thing would be to create some new advertising, possibly with models of different ethnicities and sizes to show they don’t discriminate against anyone.
  2. As of right now, lululemon does not have a set mission statement. They always speak about healthy living and positive goals on their website and in their store, but they don’t have a set in stone mission statement. They do have a manifesto listed on their website and I think it really shows what they stand for. They post little messages on their bags such as “drink water”, “do one thing a day that scares you”, and “friends are more important than money”
  3. A set of core values is important to set for the company to look back and rely on. To sit down and make sure they are staying true to what they believe in. For lulu these should be about equality, trust, and encouragement. I think these are things they initially wanted for the company but are lacking now because of Chip Wilson. They most definitely encourage, but I think they need to remember to be truthful so consumers can re gain their trust in the company.
  4. Monitoring ethical behavior and productivity is something that needs to start in individual stores. Having a responsible manager in the store enforcing ethical behavior will cause employees to naturally behave ethical, knowing that is how the work environment is. Having someone responsible on staff to set a positive example is something they should really look for. They most definitely should create a code of conduct and ethical rules the company stands by that all employees should have to sign off on if they want to work for the company. This way they are aware of the expectations and consequences if they fail to abide by them.
  5. Hiring, firing and promoting procedures are pretty standard but I think it is important to have rules and regulations written down for all employees to look at before hiring so they know what they are expected of when coming into the company. Because of this, I think a breach of those rules is grounds for firing. However, a conversation and warning system could be put in place for the employee to have a second chance depending on the situation at hand. Similar to how Starbucks deals with their firing, they have a strike system where the first time is a verbal warning, second time you need to meet privately with your manager, and the third is usually that employee being fired. I think this creates an understanding between the employee and employer which is needed for a good work environment. As for promotional procedures, it is retail, and I don’t believe there's an expectation to just be promoted because of years worked, however if an employee demonstrates exceptional leadership skills, positivity, good with customers, creating a lot of sales, then by all means a promotion should be given at some point to reward that employee for their hard work and seriousness about bettering the store they work in.
  6. As stated before, Lulu needs to remarket their company. Yes, almost everyone has heard of this brand, but that was the old them. They should remarket showing their new CEO, possibly mentioning the fact that he was the president of TOMS and I think that would draw a lot of people in due to the fact that TOMS was a very successful company because of how much positivity they spread and the wanting to give back. 
  7. All of these steps will come together to boost Lululemon's reputation and create an even larger profit for the company.

Bhasin, Kim. "Christine Day Steps Down As Lululemon CEO." The Huffington Post., 10 June 2013. Web. 12 Apr. 2017. <>.

Boyle, Catherine. "Lululemon Founder Steps down as Chairman." CNBC. CNBC, 10 Dec. 2013. Web. 02 Mar. 2017. <>.

Deveau, Scott. "Yoga Mogul Has Critics in a Knot." The Tyee. The Tyee, 17 Feb. 2005. Web. 02 Mar. 2017. <>. 

Lululemon Athletica. "Management & Board of Directors | Lululemon Athletica." Management & Board of Directors | Lululemon Athletica. Lululemon Athletica, n.d. Web. 02 Mar. 2017. <>.

O'Reilly, Natalie. "Just Who Is Lululemon's New CEO Laurent Potdevin?" The Motley Fool. The Motley Fool, 27 June 2014. Web. 12 Apr. 2017. <>.

Peterson, Hayley. "Lululemon Founder Chip Wilson Resigns from Board." Business Insider. Business Insider, 02 Feb. 2015. Web. 02 Mar. 2017. <>. 

Peterson, Hayley. "8 Outrageous Remarks By Lululemon Founder Chip Wilson." Business Insider. Business Insider, 10 Dec. 2013. Web. 02 Mar. 2017. <>.

Bhasin, Kim. "Christine Day Steps Down As Lululemon CEO." The Huffington Post., 10 June 2013. Web. 12 Apr. 2017. <>.

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