Lululemon directors re-elected despite founder’s attack
Lululemon sheer pants scandalAs if the price of a pair of yoga pants ($98!) from this cultish Canadian company was not scandalous enough, the outfitter had to recall them when customers complained the pants were see-through. Lululemon founder Chip Wilson only made matters worse when he blamed the sheerness issue on the size of women's thighs. He resigned from his chairman position in December.
Two Lululemon Athletica directors who angered founder and top shareholder Chip Wilson were re-elected to the retailer’s board on Wednesday, a company spokesperson said. A third director, CEO Laurent Potdevin, who took the helm in January, was also re-elected.
Earlier in the day, Wilson said in a statement that he had voted his 27% of shares against the re-election of Chairman Michael Casey, a special advisor to Starbucks, (SBUX) and fellow board member RoAnn Costin, president of Boston-based private-equity firm Wilderness Point Investments. (Lululemon’s other directors will face a vote next year and in 2016.)
Wilson called for a shakeup of Lululemon’s board, saying it was “heavily weighted towards short-term results at the expense of product, culture and brand and longer-term corporate goals.” The company later disputed that assertion in a press release of its own.
The founder’s call for a boardroom shakeup comes as Lululemon, a maker of yoga clothing, struggles to regain its footing from a debacle in March 2013 when it was forced to recall some of its popular pants after customers complained about the material being so thin that it was see-through. That issue ultimately led former CEO Christine Day to step down.
Meanwhile, Wilson, who founded the company in 1998 and previously served as CEO from 1998 to 2005, generated negative press late last year when he said the company’s pants weren’t appropriate for all body types. Soon after making those comments, Wilson announced he would step down from the chairman post, but would remain a board member.
Lululemom has long been a Wall Street favorite thanks to its fast growth, but that has cooled. Analysts expect it to report a 1.5% decline in comparable sales, according to Consensus Matrix, when it reports quarterly results Thursday morning. Lululemon (LULU) stock is 43% off a 52-week high.