Lululemon Off the Hook for Lawsuit
It’s no secret that Lululemon had a rough year last year – they were under fire for body-shaming and had a class action lawsuit filed against them, accusing them of defrauding investors by hiding defects in some yoga pants that resulted in a massive recall. Investors went on to argue that leaders at the company had been “falsely touting its quality control, covering up an inability to address shortfalls, using deep discounts to boost market share, and concealing plans to replace its then-chief executive, Christine Day.” The entire recall cost Lululemon roughly $2 billion of market value for the Canadian company.
Despite all arguments, it looks like Lululemon is getting off the hook! Last Friday, U.S. Judge Katherine Forrest released a draft decision that proposed the case to be dismissed, stating that the “statements [are] too general to support a reasonable investor’s reliance [and] are not actionable.”
The Canadian activewear company was recently being named one of the top 50 retail brands in North America and now with this lawsuit knocked down, Lululemon must be feeling good! Hopefully they can keep up the positive improvement for 2014.