Business

Lulu chief bolts

“Pantsgate” is over at Lululemon — and soon the tenure of Chief Executive Christine Day will be, too.

Day, who has run the yoga-wear retailer for more than five years, surprised Wall Street yesterday by announcing she will retire once a replacement is found.

The retailer’s stock is up 465 percent over the last five years, while the Dow Jones industrial average has struggled to a 21 percent gain during the same period.

But three months ago, Lululemon was forced to yank from store shelves its most popular yoga pants because they were too sheer, exposing customers’ buttocks when they bent over.

The company became the butt of jokes as shoppers raised a rumpus, but analysts and investors weren’t cracking wise yesterday: Lululemon’s shares plunged as much as 9 percent in after-market trades after closing the day up slightly at $82.28.

Amid speculation that she was squeezed out, Day, 51, said she made a “personal decision” to leave Lululemon and its board. She announced her departure early, she said, “in keeping with our efforts to be open and transparent.”

“Our stores are back to being their cheeky, irreverent selves,” Day added.

Vancouver, Canada-based Lululemon said its fiscal first-quarter gross profit rose 9 percent to $170.7 million — including a $17.5 million charge related to the pants recall.

Gross margin got a swift kick in the pants, dropping to 49.4 percent for the quarter from 55 percent a year earlier.

Still, the hit wasn’t as bad as Wall Street expected. Quarterly revenue increased 21 percent to $345.8 million, edging out expectations that had been lowered in March.

“It’s a bummer,” one investor said late yesterday after Day’s departure was announced, opining that the buttocks brouhaha was overblown.

“’Pantsgate’ is over. It wasn’t that big of a deal.”

The debacle had already cost Chief Product Officer Sheree Waterson her job.

Lululemon said yesterday it is creating three new upper-level management posts that will focus on design, logistics and quality control.

Day said she told the board she was leaving on Friday, and the board formed a search committee over the weekend.