Lululemon accused of concerning issue in new lawsuit

One of the fastest growing corners of the retail industry is the fitness market – and it's pretty understandable why.

Fitness and athletic activities are on the rise; more people are participating in some kind of sport or competitive activities like workout classes.

And with the rise of interest in these activities, a few brands have been set up to grab the most market share.

Currently, the top loved brands in the athleisure space are:

Nike
Adidas
Puma
Lululemon
Under Armour

But after covid, athleisure skyrocketed from something you might proudly wear to a workout class to an entire fashion unit in and of itself.

Now more than ever, it's acceptable to dash out for anything from a grocery store run to a night out in leggings and sneakers. In fact, take a look around most college campuses or metropolitan high streets. Chances are, many folks are wearing leggings, sweatpants, hoodies, or athletic shoes – or sometimes all of the above.

Especially now since fewer folks are working in an office five days a week, popular athleisure brands like Lululemon (LULU) are benefitting from a surge in interest in comfortable, functional – and fashionable – clothing.

A Lululemon Athletica store exterior is seen in Atlanta.
John Greim/Getty Images

Lululemon has surged in popularity

When you think of one of the most beloved athleisure brands in the space right now, Lululemon is probably top of mind.

It initially gained traction among the yoga enthusiast crowd thanks to its buttery soft leggings and tank tops that were built to move with its wearer – and perform under sweaty conditions.

But the brand has since expanded out to other activities; some of its top selling products cater to runners, golfers, and yes, even loungewear enthusiasts.

Not only is Lululemon popular for its buttery soft clothes. It's also successfully built a scarcity appeal inherent to its brand.

It rarely puts its products on sale; management has been outspoken about its commitment to full-price products and limiting inventory where it can, which leads to a feeling of scarcity that often benefits retailers.

But the brand isn't just in it for profits. It has worked hard to cultivate a socially conscious reputation, promoting body positivity and environmental activism.

Lululemon accused of issue in new class action suit

But according to a new class-action lawsuit, filed in the U.S. District Court for the Southern District of Florida, Lululemon's "Be Planet" ad campaign is misleading.

The lawsuit alleges that Lululemon has overstated its commitment to sustainability and environmental friendliness, at times overselling how much good it's actually doing for the planet. This behavior, typically referred to as greenwashing, is increasingly common among large corporations as the rise in environmental, social, and governance (ESG) initiatives pervade corporate talking points.

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"Lululemon’s 2022 impact report, cited in the lawsuit, reveals a near-doubling of scope 3 emissions compared to 2020. The lawsuit further contends that Lululemon’s marketing strategy employs imagery of nature and environmental responsibility to create a perception of the brand as environmentally conscious," Retail Insight Network reports.

"This, the plaintiffs argue, is designed to justify premium pricing for its products."

Earlier this February, the environmental activism nonprofit Stand.Earth also asked the Canadian Competition Bureau to investigate Lululemon's 2020 Impact Agenda, which outlines Lululemon's commitment to reducing waste and harm to earth and the environment.

Lululemon pushed back, claiming the company has made strides in its environmental and sustainability initiatives.

"We are proud to have reached our goals of 100% renewable electricity and a 60% absolute reduction of greenhouse emissions in our owned and operated facilities. We obtained independent verification of our progress against these metrics," a Lululemon spokesperson said.

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