Lululemon chief executive to step down Christine Day is stepping down as chief executive of the sportswear retailer Lululemon Athletica three months after it was plunged into crisis over yoga pants that were excessively see-through. The announcement came on Monday as the company warned that the fallout from the crisis would continue to squeeze its profitability in the current quarter. The twin blows sent its shares down by as much as 15 per cent in after-hours trading. Lululemon, based in Vancouver, Canada, had built one of the hottest brands in North American retail by selling stylish, high-priced yoga outfits to mostly young women. But the past quarter has been problem-filled. In mid-March Lululemon recalled some of its tightfitting yoga pants after realising they were made of a fabric that was too sheer. The discovery left it with a shortage of its trademark product and highlighted weaknesses in its supply chain. Ms Day said she had told the board of her "personal decision" to step down last Friday after five-and-a-half years in the job. She did not link the move to the see-through pants and said the board had formed a committee to find a new chief executive over the weekend. In a statement Ms Day said it was "the right time to bring in a CEO who will drive the next phase of Lululemon's development," but when asked on a call what skills a new leader would need she said that was for the board to say. In after-hours trading Lululemon shares fell 9 per cent in the 30 minutes after news of Ms Day's departure broke, then slid further as executives told analysts that its profit margins would remain under pressure for longer than expected. After recovering from a low, its shares were down 13.3 per cent at $71.31 at 6pm in New York. Lululemon's profitability will be squeezed partly by new investments in product testing, quality assurance and raw materials procurement, said John Currie, Lululemon's chief financial officer. In addition, its sales will continue to suffer because the shortage of its trademark black pants continues. Mr Currie said problem-free items have been "trickling in" to its stores since last week, but that its shelves are not fully stocked. Lululemon also dismayed analysts by admitting that the design of some of its other spring clothes had not been popular with customers because they were too colourful. As a result, it said it would have to mark down prices to clear them by an average of 15 per cent, rather than its typical 10-12 per cent, eroding margins further. Mr Currie said Lululemon's gross margin percentage - a key measure of profitability - would be in the "low-50s" in the current quarter, compared with 55 per cent the previous year. On Monday, the company reported results for the quarter to May 5, which matched or exceeded market expectations. Revenue rose 21 per cent to $346m despite the see-through pants crisis. Net income was $47.3m, or 32 cents per share, up 1.3 per cent from a year ago.