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As lululemon reports its fourth quarter and full year 2025 results, shareholders will be critically evaluating the company’s claims of success or improvement. The core issue at lululemon is one the Company has struggled with for years: there is a disconnect between the Company’s creative engine and the Board’s understanding for how brand power and product excellence fuel cultural strength, margin durability and long-term shareholder value.
On behalf of all shareholders, I believe lululemon leadership must provide detailed answers to the following questions so that investors, partners, employees and everyone who cares about lululemon can understand where current leadership is taking this Company.
- Clarifying Discount Intensity and its Impact to Premium Brand Value
How should investors reconcile the message around operational improvements with the reality of continued discounting to offset declining North America store comps for which product was purchased? Shareholders should understand whether the Board recognizes the relationship between a dollar discounted and the fall in brand power. Each dollar lost from discounting is a dollar that could have been invested into expanding the power of the lululemon brand.
- Defining How Creativity and Newness are Prioritized to Drive Growth
Recent product launches reflect a persistent “stale and predictable” approach as Interim Co-Chief Executive Officer Meghan Frank described in her recent interview with The New York Times. Shareholders should understand the Board’s decision-making process on product launches, data used to inform these decisions and what the Board has changed in their evaluation and oversight process. The Board is fully aware of what has gone missing in the last six years. - Addressing Repeated Operational Mistakes
What structural changes have been made to address the increasing frequency of product failures as seen with “Get Low” and “Breezethrough”? If the Board has analyzed its failures in new categories such as jeans, cosmetics and running shoes, shareholders should be made aware of the learnings as a show of good faith to rebuild confidence in Board leadership. - Fixing Core North American Sales Before it Impacts Global Markets
The company has reported negative or flat same store sales for the past seven consecutive quarters in North America. Investors would benefit from same store sales data on a specific group of bellwether, trend-setting markets, such as New York, Miami, Vancouver and Los Angeles, to better understand if this negative momentum will accelerate. How will you prevent the underperformance in core franchises in North America from translating to slower growth in mainland China and other international markets?
The three independent candidates put forth in our campaign for change, Marc Maurer, Laura Gentile and Eric Hirshberg, would ask the tough questions in the boardroom and bring the accountability and oversight lululemon needs. It is my belief shareholders will understand that the current leadership team, who are overseen by a Board with no brand and product experience, is incapable of addressing the fundamental issue of being able to onboard brand and product leadership at the management and Board level.
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The company has released a media statement encouraging LULU shareholders to visit creativityfirstlulu.com to review the need for change and learn about Wilson’s nominees.
Wilson, together with the other participants, as defined below, intends to file with the U.S. Securities and Exchange Commission (the SEC) a definitive proxy statement on Schedule 14A (the Definitive Proxy Statement) and accompanying Gold Universal Proxy Card to be used to solicit proxies from the shareholders of the company in connection with its annual meeting.
The participants in the solicitation of proxies are Chip Wilson, Anamered Investments, Inc., LIPO Investments (USA), Inc., Wilson 5 Foundation, Wilson 5 Foundation Management, Ltd., Five Boys Investments ULC, Shannon Wilson, Low Tide Properties, Ltd., House of Wilson, Ltd., Marc Maurer, Laura Gentile and Eric Hirshberg (collectively, the Participants).
Image courtesy Lululemon
