Attention all you yoga pants stockholders out there, put down your diamond crusted mala, you may want in on this. Investors have gone ahead and filed a class action lawsuit against Lululemon for being shady with their see-through pants problem, allegedly making “false and misleading statements,” hiding defects while cutting costs and defrauding shareholders when all hell and heinies broke loose.
Via CNN Money:
The lawsuit, filed in U.S. District Court for the Southern District of New York, seeks to recover investors’ damages from the 17% stock price plunge on June 10, when the company announced first-quarter results and Chief Executive Christine Day left the company.
In March, Lululemon recalled black yoga pants that were unintentionally see-through. The stock initially fell 6% on the news, but rose 24% during April and May, when the lawsuit alleges the company made positive statements despite knowing there were serious issues, including discussions to replace Day as CEO.
The suit says that between March and June, executives at Lululemon (LULU) failed to disclose “quality defects in the Luon yoga pants … [which] “resulted in part from Lululemon’s efforts to cut costs in order to raise profit margins to the detriment of product quality and brand reputation.”
The class action suit is open for other investors to join and it sounds like no one needs to twist anyone’s arm into bound side angle pose to do it.
By the way, this lawsuit is different from the one filed in May by shareholders accusing the company of increasing exec bonus pay right before the see-through pantscapade. There is still no consumer class action suit currently, but give it time.
To add to the horror, that awful murder involving two Lululemon employees in a Bethesda, Maryland retail location is now a book. Rough year so far you guys.