Posted by & filed under Accounting Theory, Managerial Accounting.

Description:  Ousted Lululemon Chair, Chip Wilson, had some things to say about the company he founded.  The clothing company has been facing pressure from rivals such as Under Armour, pressures which had driven down Lululemon’s market value in recent months. Wilson remarked that while Under Armour has about three times the market value of Lululemon, “Lululemon has a much better business model, makes bigger margins, makes bigger profit”. Wilson also apologized for comments in 2013 that hurt Lululemon’s image.

Source: Globeandmail.com

Date: October 6, 2015

Link: http://www.theglobeandmail.com/report-on-business/lululemon-founder-takes-responsibility-for-controversial-remarks/article26692505/

Discussion Points:

1) Why do you think Under Armour would have a higher market value than Lululemon if Lululemon has bigger margins and a higher profit?

2) What reasons might you give for Lululemon having bigger margins than Under Armour?

3) What do you think of Chip Wilson taking responsibility for his 2013 comments?

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