Lululemon CEO stands by decision to fire employees who intervened in robbery

ByParija Kavilanz, CNNWire
Tuesday, June 6, 2023
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NEW YORK -- Lululemon's CEO Calvin McDonald said the retailer stands by its decision to fire two employees who tried to intervene during a theft at one of its stores.

The incident took place in late April at its store in Peachtree Corners, Georgia, CNN reported.

Cellphone footage from the store shows two men wearing hoodies and face masks rush into the store and grab armloads of merchandise from areas closest to the entrance of the store and then rush out. One female employee is seen near the entrance of the store close to where the men are heard yelling "get out" repeatedly. It is unclear if the footage was taken by a customer or an employee.

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"In this particular case, we have a zero-tolerance policy that we train our educators on around engaging during a theft. Why? Because we put the safety of our team and of our guests front and center," McDonald said during a CNBC interview on Friday. "It's only merchandise."

McDonald said the employees "knowingly broke the policy" and engaged with the thieves, including following them out of the store. Three men were later apprehended.

While Lululemon has come under fire, notably from conservative media, for seemingly penalizing brave staffers, "these situations always are a delicate balance," said Read Hayes, criminologist at the University of Florida and director of the Loss Prevention Research Council, Its members include Walmart, Target, Home Depot and Gap.

"You're dealing with potentially very aggressive and violent people committing these crimes," he stressed. "Retailers have seen employees lose their lives when they've tried to intervene."

Lululemon sent a statement to CNN Tuesday reiterating the company's "absolute zero-tolerance policy" for "engaging with guests in a way that could put themselves, or others in harm's way."

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The company went on to refer to its "longstanding protocols in place" in regards to safety, and said that "no amount of merchandise in a store" is worth the risk for an employee.

"The two employees at our Peachtree Corners location in Georgia were not terminated for calling the police.... Employees are able and instructed to call 911 when needed, and that was not the cause of termination," the statement said. The employees risked putting themselves and others "in harm's way," Lululemon noted. Several retailers, from Dollar General to Walmart, have had employees or security staff injured or killed during attempts to intervene in theft.

As economic fears grow amid inflation and rising borrowing costs, incidents of retail crime are mounting. Retailers large and small say they're struggling to contain the escalation of in-store crime in particular- ranging from petty shoplifting to organized sprees of large-scale theft that clear entire shelves of products.

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Target said last month that it was bracing to lose half a billion dollars this year because of rising theft. Nordstrom, Whole Foods and some other big chains said they were abandoning San Francisco because of changing economic conditions or employee safety.

Many other retailers have blamed crime for closing stores, although Walgreens, notably, has backed away from an earlier claim of rising theft at its stores, saying it may have overstated the problem.

The National Retail Federation said total annual shrink, a retail metric that tracks inventory losses caused by external theft, including organized retail crime, employee theft, human errors, vendor fraud, damaged or mismarked items, reached $94.5 billion in 2021, up from $90.8 billion from 2020. Nearly half was attributed to large-scale theft of products. The group said retailers on average saw a 26.5% increase in this type of theft over the previous year.

"This is organized retail crime. It's an opportunistic crew stealing specific items from a specific place or one item from many places to resell them," said Hayes. The stolen goods are most often sold online or to neighborhood mom and pop shops or at street fairs, for example.

It's a point that McDonald stressed as well. "We've had instances, and we've seen in other retailers instances where employees step in and are hurt or worse, killed," he told CNBC. In 2011, a Lululemon staffer was killed by another worker in a brutal stabbing in Bethesda, Maryland. The killer, later convicted of first-degree murder, had initially reported that thieves committed the crime.

CNN could not immediately reach the two employees who were fired in Georgia.

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