The founder of Lululemon Athletica Inc. is continuing to pressure the retailer to shake up its board and processes after he says it responded to his suggestions in a “weak and insufficient” way.
In a letter sent to Lululemon shareholders Friday, Chip Wilson said it took the company’s board 70 days to address three board nominations and several other suggestions he made in December.
The response “does not reflect serious engagement toward resolving Lululemon’s challenges,” Wilson said.
Rather than heed his suggestions, he alleged the board only expressed openness to making some unspecified director changes over several years and dismissed his idea to create a brand product committee.
Lululemon did not immediately comment on the letter from Wilson, who left its board in 2015 and has since been estranged from the company, but remains a significant shareholder.
Wilson has been pushing Lululemon to make change in part because Lululemon’s stock has lost nearly half of its value in the last few years.
He began his crusade last year when Lululemon CEO Calvin McDonald announced he would depart the business in January. McDonald is set to become CEO of the Wella Company, which owns beauty brands OPI and Briogeo, in April.
Lululemon chief financial officer Meghan Frank and chief commercial officer André Maestrini are splitting the CEO role on an interim basis.
Wilson’s letter said, “there is an existing crisis to hire a permanent CEO (caused by the third failed succession planning process).”
The company is also struggling to recruit new board members, he alleged. He says existing members have indicated that they found several highly qualified director candidates who declined to join the board until the company’s current proxy contest is resolved.
Wilson believes appointing his recommendations — Marc Maurer, a former co-chief executive of On Holding AG, Laura Gentile, a former chief marketing officer of ESPN and Eric Hirshberg, a former chief executive officer of Activision — could turn things around but hinted even more of a shakeup may be necessary.
“While we have proposed changing three directors, our strong feeling is that more than three directors should be replaced,” he said in his letter.
Wilson did not offer further board nominations in his letter and his spokesperson did not immediately respond to a query about whether he will put other names forward.
Wilson started Lululemon roughly 28 years ago in B.C. as a design studio by day and a yoga studio by night, but it eventually morphed into a trendy athletic apparel retailer that has spread across the globe.
It’s struggled in the last few years as rivals like Alo and Vuori upped their game and customers started criticizing Lululemon for a lack of new styles and two unflattering apparel lines that were pulled from shelves. Recently, the company started selling one of those lines again with a note advising customers to size up.
