Lululemon stock rebounds following negative tests over seaweed clothing claims
Shares of yoga-inspired apparel maker Lululemon Athletica Inc. rebounded from an early dip prompted by a newspaper report disputing company claims about the benefits of clothing it says contains seaweed.
On the TSX, the stock rebounded from alow of $37.88to finish with a gain of $1.30 at $42.80. On Nasdaq, the stock gained almost 2 per cent to end at $44.29.
Vancouver-based Lululemon says in its promo material that its VitaSea clothing line is made with seaweed fibre, "which releases marine amino acids, minerals and vitamins into the skin upon contact with moisture."
In a report published Wednesday in the New York Times, the newspaper said it commissioned a laboratory to test the content of the clothing. The lab said it couldn't rule out the presence of seaweed in the Lululemon clothing, but also couldn't prove Lululemon's claim.
The Times said it had the Lululemon clothing tested after an investor who is shorting the company's stock had the clothing tested and gave the newspaper the results.
Lululemon said it had not independently tested its products, butrelied on the claims ofits manufacturers. The company said it would test the fabric in the future.
"If you actually put it on and wear it, it is different from cotton," Lululemon founder and chairman Chip Wilson told the Times. "That's my only test of it."
Lululemon shares made their debut in July at an IPO price of $18 US. The stock went from $25 US in July to $60 US in October before pulling back to its current level.