In March, everyone got a good laugh at Lululemon Athletica, when the company announced it was recalling some of its black yoga pants because, turns out, they were see-through.
But Lululemon investors aren’t laughing. A group of them have filed a lawsuit against the athletic apparel company, claiming it made “false and misleading” statements regarding the costs associated with the Luon-branded see-through pants recall.
According to the suit, Lululemom executives failed to disclose the “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 suit, which the investors filed in New York, seeks to recover a staggering 17 percent drop in the company’s stock price that occurred on June 10—the day Lululemom released its first-quarter earnings and announced that the company’s CEO had left her post.
The suit also seeks class action status, and is open for other investors to join.
Read more about this suit on CNN.
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