“Lululemon admits to color mishap and Wall Street punishes its stock”

On 31 Mar 2017, the Lululemon stock prices crashed by more than 24%. This resulted in market capitalisation loss of approximately USD 2 billion. The reason:

Lululemon’s executives blamed the early-year miss on a Spring collection that lacked depth and color.

So, how does a  leading brand like Lululemon, make such an error?

Is it that the merchandisers did not know or did not realise that there needed to be more colour in the range?

We  believe that the root cause for this is the way fashion and apparel brands analyse their assortment, inventory and sales performance data.

The traditional reporting systems deployed by brands, look at tabular and numeric data sorted by product codes. And it is very hard to identify colour gaps or design gaps, in the assortments based on spreadsheet type reports. This leads to information blindness on designs and colours, resulting in huge sales opportunity losses.

This information blindness further compounds down the value chain, ,because after product design function, managers in organisations are heavily  dependent on spreadsheet type reports, and completely missing on the design nuances. There is no early warning system, as stores and operations cannot communicate on required changes to the assortments in a way that users in design and sourcing would understand.

It is precisely to address this problem, that we created Kanvas, an intuitive platform that helps identify gaps around colour palette, silhouette etc.

Kanvas further allows for the users across entire value chain to communicate and collaborate on design inputs, feedback, allowing quick response.