This is a point about corporate social responsibility, using consumer marketing and Canadian company Lululemon as an example. While consumers are willing to invest a fair amount of faith and goodwill in a company without proof of a detailed CSR plan, at the first sign of a crisis, they tend to look for evidence, independent testing and videotape of manufacturing facilities with happy and well-educated workers.

Which brings us to the upscale active wear chain Lululemon.

Seaweed or no seaweed? Health benefits from the product or no benefits? That’s the question the New York Times asked this week about a fabric called VitaSea and the products made of the fabric sold by the company. The newspaper (after a tip from a shortseller of Lululemon stock) had tested two of their products for presence of seaweed, as claimed. There didn’t seem to be any.

The company’s first response?

When asked about Lululemon’s product tags and the claims about vitamins and minerals, [Chip Wilson, founder, product designer and board chair] said, “That’s coming from the manufacturer. If you feel the fabric, it feels a lot different.”

And the quotes got worse:

Director for products and design. She said the company would test the fabric in the future.“We will be diving in deeper, so that our educators on the floor can answer those tough questions,” Ms. Schweitzer said. “Right now, we are relying on the mill and SeaCell’s information.”

That’s not the best of answers. Just ask Nike or Mattel how “the manufacturer is responsible” works as a rebuttal to criticism of product quality. Which must be one reason why Canada’s Competition Bureau got involved.

The company responded quickly, noting that they regularly ask an independent lab to test their materials and products, and that they did contain fabric derived from seaweed.

Still, you have to wonder why that fact wasn’t communicated to a BSD like the New York Times when they first asked. (a point Eric also brought up)

By the end of the week, the Competition Bureau had struck an agreement with Lululemon to stop making claims of health benefits for the fabric.

“Those claims have to be scientific and they have to be provable,” said Andrea Rosen, acting deputy commissioner of the bureau. “The onus is on the advertiser, not the government, to prove that the tests are adequate prior to making the claims.” (NYT)

Bob Meers, Lululemon’s CEO, issued a statement after the Competition Bureau announcement, noting that:

“In order to ensure the integrity of our product labelling, we are conducting a review of the therapeutic attributes described on all product hang tags.”

That seems to mean the score is product quality = 1, product attributes = 0.

Overall, their products are better made and more stylish than other active wear products on the market. Which means this contretemps probably won’t affect the company in the long term, since they continue to expand into the United States and abroad, winning converts and customers at the same time.

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