Lululemon product chief's departure adds to 'wall of worry'

(Bloomberg) — Lululemon Athletica Inc. shares fell. fell by as much as 7% on Wednesday after the company said its chief product officer was leaving, raising concerns among analysts that the sports brand was losing its edge.

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Sun Choe will not be replaced. As part of a larger organizational realignment, Choi’s responsibilities for product design will transition to Jonathan Cheung, the company’s global creative director, Lululemon said in a statement.

Choi’s exit increases a “wall of concern” in the near term, Raymond James analyst Rick Battle wrote in a note.

Other analysts saw the departure as a sign of further weak sales. Adrienne Yeh, an analyst at Barclays, said the resignation was an “incremental negative data point,” suggesting that changes to the company’s current lineup to attract more clients “may take longer to course correct than initially thought.”

Read More: Lululemon Falls as Chief Product Officer Departs: Street Wrap

Lululemon stock was down 37% this year through Tuesday’s close, while the S&P 500 was up 12%. If Wednesday’s decline continues, it will be the sixth straight daily decline for stocks.

Some of the company’s most popular products, including the belt bag, began to lose popularity, while competition increased as other fashion retailers added more sportswear to their mix. Lululemon is also struggling to control its inventory, which has led to lower profits.

When the company reports first-quarter earnings on June 5, analysts expect it to report a 6.6% increase in comparable store sales, a rare increase for Lululemon’s sales.

–With assistance from Joel Lyon and Allegra Fradkin.

(Updates posts in first paragraph)