Lululemon Athletica’s founder, Chip Wilson, announced on Monday the initiation of a proxy battle by proposing three independent directors to the company’s board. This move comes shortly after the Canadian apparel brand revealed the departure of CEO Calvin McDonald without a clear successor in place.
Facing challenges in engaging younger, affluent consumers, Lululemon has encountered strong competition from emerging brands like Alo Yoga and Vuori, as well as pressure from activist investor Elliott Management. Consequently, the company’s stock has plummeted by almost half this year.
Wilson has put forward three nominees for director positions on Lululemon’s board, which include Marc Maurer, former co-CEO of On Running, Laura Gentile, former chief marketing officer at ESPN, and Eric Hirshberg, former CEO of Activision.
In response to the CEO transition, chief financial officer Meghan Frank and chief commercial officer André Maestrini have been appointed as interim co-CEOs while a permanent replacement is sought. Wilson expressed dissatisfaction with the board’s handling of the CEO succession, citing it as the third instance of inadequate planning. He emphasized the need for a board with stronger product expertise to guide the selection and support of the next CEO.
Notably, Lululemon is yet to comment on Wilson’s move. Morningstar analyst David Swartz remarked that the addition of new board members could help ease tensions with Wilson, although he highlighted that only one nominee, Maurer, has industry-specific experience at Lululemon. Swartz also speculated that Wilson did not seek a board seat for himself due to his substantial ownership in Lululemon’s competitor, Amer Sports.
