Shares of Lululemon are down sharply today, after the high-end US yoga-wear retailer announced its CEO Christine Day would be stepping down last night. Just after 12 pm ET, the shares are lower by roughly 17%. Now remember, during the entire, embarrassing see-through pants snafu that emerged in March, Lululemon shares were only down by about 12% at their worse. (And the stock price subsequently regained all its losses and then some.)
True, the pants problem prompted a costly products recall which weighed on Lululemon’s earnings announced yesterday. But Day says it was her decision to move on from the company, where she oversaw a 400%-plus run-up in the share price as CEO. If she was forced out in the aftermath of pantsgate, the reaction of the shares today suggests that was a very bad idea.