It's not often that a yoga festival becomes a stock market story, but that's exactly what’s happening to Lululemon Athletica Inc (NASDAQ: LULU) right now. The activewear giant arranged a large-scale promotional event on a section of the Great Wall of China near Beijing in late May, complete with thousands of attendees, Chinese celebrities, and what was meant to be a traditional drum performance. The trouble is that the drum used reportedly wasn't Chinese at all. It was Japanese, and Chinese social media has not been gentle about it.
The backlash on the Chinese social media platform Weibo has been substantial, with the related discussion topping tens of millions of views, and the company forced to issue an apology. Considering that China has been one of the most important growth markets for Lululemon over the past few years, this is the absolute last thing the stock needed. The shares were already deep in the doghouse, and a public misstep like this only deepens the sense that everything that could be going wrong for Lululemon is.
