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The loss is expected to cost the company around $60 million, CEO Christine Day said in an earnings conference call yesterday.
So what will happen to those thousands of pairs of pants?
In the past, the company has recycled discarded products through the company deBrand, where they become art or furniture, reports Jacqueline Detwiler at Esquire.
Lululemon's website also explains the process:
"For products that just don't make the grade (i.e. the function is compromised) we work with a Vancouver-based company, deBrand, to reuse and recycle the product....They’ve found new homes for scuffed, scratched, and sun damaged yoga mats, created art for our stores, and crafted furniture for the SeaWheeze lounge with our factories' extra fabric."
Before it can discard of the pants, however, Lululemon needs to figure out what caused the defect.
It's also worth noting that defects in the past have been relatively minor. Lululemon has a lot more material to dispose of this time.