UPDATE 2-Lululemon stock drops as yoga pants expose problems

Tue Mar 19, 2013 3:19pm EDT
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* Quality issues could undermine Lulu's brand, analysts say

* Lower-priced rivals now have chance to win customers

* Taiwan supplier says Lululemon misjudged consumer tastes

* Lululemon lowers sales forecast for fiscal Q1

* Shares down 3.3 pct on Toronto Stock Exchange (Updates market reaction, adds detail from customer reviews.)

By Allison Martell and Yimou Lee

TORONTO/HONG KONG, March 19 (Reuters) - Shares of Lululemon Athletica Inc slid on Tuesday after the trendy retailer said it was recalling batches of pants it called too transparent, an embarrassment that raised fresh questions about whether it could sustain its stellar growth.

Late on Monday, Lululemon said it was pulling from its store shelves about 17 percent of the women's black pants made with its signature stretchy "Luon" fabric because the products fell short of technical specifications.

It warned that the recall of the see-through pants would have a significant impact on financial results.   Continued...