Chip Wilson, founder of Lululemon Athletica, has filed to sell his family's stake in the yoga and running gear maker.
Photograph by Ben Nelms — Reuters
By John Kell
February 2, 2015

Lululemon Athletica founder Chip Wilson said Monday he will step down from the retailer’s board of directors, a move that ends an at times difficult relationship between the yoga apparel maker and its former chief executive.

Wilson, who founded Lululemon (LULU) in 1998 in Vancouver, said he had achieved the goals he had set since he came back to the retailer in 2013 — to help it mitigate an issue it had with yoga pants that were too sheer.

“After careful thought, I believe that now is the right time to step away from the board,” Wilson said in a statement. He intends to focus more on his work with a new business called Kit & Ace, a luxury brand founded by Wilson’s wife and son.

Wilson, who served as Lululemon CEO from 1998 to 2005, built the brand to meet the needs of women as they were increasingly participating in sports, specifically yoga. Retail expansion soon followed, and Lululemon, known initially as a yoga company, has since expanded its product slate to also focus on items meant for running and biking, as well as move to sell more gear to men.

But the company and its founder have both faced challenges. Lululemon in 2013 was forced to pull some of its popular pants after a mistake by a supplier left the pants somewhat see-through. That issue led to the ouster of former Chief Executive Christine Day, as well as the return of Wilson. Some analysts contend that the brand has still not fully recovered from that debacle. Lululemon is also seeing greater competition in the yoga category, as Gap (GPS) and others tackle the market.

Wilson himself was at times a controversial figure. He had generated some negative press when he said that the company’s pants weren’t meant to work for all body types. That comment was broadly derided as insensitive and out of touch.

Last year, Wilson called for a shakeup of the company’s board, saying it had focused too much on short-term results. He later reached a deal to refrain from waging or supporting a hostile takeover of the business until 2016. Under the terms of that deal, Wilson also sold half of his 27.7% stake.

“Trying to affect a fundamental shift in direction is hard and I had to raise a strong voice to make myself heard while taking decisive action to implement change,” Wilson said on Monday. “I am happy to say that I now believe the company has returned to the core values that made it great — product, brand and culture — and is back on track.”

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