Michael Burry
· Cassandra Unchained
· June 24, 2026 at 23:38
· ⏱ 5 min read
| Read on Substack ↗
Summary
Michael Burry recounts two major crises in Lululemon's history—the 'Who is John Galt?' bag controversy and the yoga pants transparency scandal—to argue that the company repeatedly self-inflicts wounds through poor management and tone-deaf branding. The historical parallel suggests that current shareholders may again be suffering from similar management failures, implying ongoing risk in LULU.
•In 2011, Lululemon printed 'Who is John Galt?' on shopping bags, alienating its core progressive female customer base and causing a PR disaster.
•Founder Chip Wilson blamed women's bodies for yoga pants transparency issues, saying 'some women’s bodies just don’t actually work,' leading to gross margins falling from ~56% to ~48%.
•Lululemon's management carousel and 'no one in charge' void exacerbated the stock's decline during the mid‑2010s crisis.
•A new mandatory tax on overseas operations cost Lululemon 250 basis points of gross margin.
•The article ends by noting Lululemon is going through a 'similar' crisis today, implying current management failures mirror past ones.
Read time5 min
Length5,422 chars
Categoryfinance
Ideas
Michael BurryFounder, Scion Asset Management; subject of The Big Short
Burry details a pattern of repeated management own‑goals and tone‑deaf branding that alienated core customers, leading to margin compression and stock declines. The final line 'this now sounding as if
Burry details a pattern of repeated management own‑goals and tone‑deaf branding that alienated core customers, leading to margin compression and stock declines. The final line 'this now sounding as if LULU went through something similar to today’s crisis' signals ongoing risk.
Risk: If current management repeats past mistakes, further customer backlash and margin erosion could pressure the stock.