Lululemon’s Founder Pushes for Board Election Changes
Lululemon Athletica Inc (LULU) founder Chip Wilson criticized the Canadian yogawear retailer’s board on Wednesday, calling for annual election of the entire board to make directors more accountable for the company’s performance.
Wilson, who is the company’s largest shareholder with a 14.2% stake, said the board should be declassified to make it more effective and not staggered, where only some directors stand for election each year.
Wilson said he was convinced that Lululemon did not have the right leadership to make changes necessary to “win in the current global, multi-channel and dynamic environment.”
Lululemon was not immediately available to comment.
Lululemon’s shares have dropped 8% in the same period.
A high-profile recall of Lululemon’s signature yoga pants in March 2013 for being too see-through led to top executive departures. The damage was compounded when Wilson said not all women are suited to wear Lululemon.
Lululemon has since worked to improve quality and solve supply-chain problems, while laying the groundwork for faster international growth. It has expanded its offerings to include more seasonal and fashionable gear to be worn outside the gym.
However, Wilson criticized Lululemon’s share and financial performance in comparison with its competitors, saying the company cannot cede its global athleisure market share to Under Armour and Nike.
Wilson, who founded Lululemon in 1998, left the board in February 2015 after disagreements with fellow directors.
He had withdrawn from day-to-day management in early 2012, and stepped down as chairman in December 2013.
Wilson launched Kit and Ace, a luxury casual wear company, in July 2014.
Lululemon’s shares were up 1.4% at $65.94 in afternoon trading.