Lululemon Athletica’s founder has launched a proxy battle to revamp the struggling yoga clothing retailer’s board as the directors search for a new CEO.
Chip Wilson, Lululemon’s second-largest shareholder with a 9% stake, has been an outspoken critic of the company’s leadership — describing the current board as “complacent” in the face of declining sales in the all-important North American market.
He said Monday he is nominating three new directors – former On Running co-CEO Marc Maurer, ex-ESPN chief marketing officer Laura Gentile and former Activision CEO Eric Hirshberg – to spearhead the search after Calvin McDonald said this month that he is stepping down as chief executive in January.
“The recent CEO change announcement was the third total failure of board oversight with no clear succession plan in place,” Wilson said in a statement. “Shareholders have no faith that this Board can select and support the next CEO without input from a board with stronger product experience.”
Activist investor Elliott Investment Management is also pushing for change at the top, having recently amassed a $1 billion stake in the Vancouver-based company. Elliot Investment is advocating for former Ralph Lauren executive Jane Nielson to become the next CEO.
Wilson, who is also Lululemon’s former chief exec, says the company has lost its “cool” factor.
The Post has sought comment from Lululemon.
This year, the company made a number of fashion blunders, introducing bright colors that landed on clearance racks and paving the way for competitors like Alo Yoga and Vuori to grab marketshare.
Known for pricy duds like $100-plus leggings, Lululemon discounted more merchandise this year than ever before in its 27-year history.
Bright red, yellow, blue, green and purple merchandise looks more like “Sesame Street,” and is overwhelming the muted, soft pastels the chain is known for, Jefferies analyst Randal Konik wrote in a research note this summer.
Lululemon’s shares rose by about 1% Monday on the news about Wilson’s proxy fight. Earlier this month, the stock spiked by 10% to $208 when McDonald announced his resignation after seven years at the helm.
Wilson said he is not advocating to put himself on the board.
“I know this campaign for change cannot be about me,” he explained. “It is about recommitting Lululemon to genuine creative leadership that will re-establish a brand of enduring strength.”
Wilson’s tenure at the company ended in 2015 when he stepped down from the board after a number of public gaffes, including his infamous explanation for a 2013 yoga pants recall. He said overweight customers were partly to blame.
“Quite frankly, some women’s bodies just actually don’t work for [the pants],” Wilson said when asked about recalled tights that were so sheer they revealed women’s buttocks.
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