Chip Wilson, the founder of Lululemon and one of the company’s largest shareholders, in a press release again called for strategic changes at the retailer and criticized Lululemon’s board’s succession planning process following the announcement that CEO Calvin McDonald will step down at the close of the current fiscal year. Wilson said the succession planning should be led by “new, independent directors with real experience.”
His comments come as Lululemon shares have fallen nearly 50 percent over the year. In October, Wilson took out a full-page advertisement in The Wall Street Journal detailing his dissatisfaction.
His full statement, issued Friday morning, follows:
“As I have communicated to members of the company publicly and privately, Lululemon needs revitalization and an infusion of new skills to get back to being a product-first company that creates real, long-term shareholder value. After overseeing years of poor decisions erode the brand and destroy shareholder value, it is clear to me that only under my increasing pressure has the Lululemon Board of Directors (the “Board”) finally started to listen. As one of the largest active shareholders of Lululemon, I am deeply concerned about what appears to be a tremendous failure by the Board to competently plan for the future and manage an effective succession process. This latest failure, in my opinion, only amplifies the urgency the company faces and the obvious need for the CEO search to be led by new, independent directors with real experience. I believe that the Board should seek the advice of individuals with specific and unique expertise, and deep knowledge of the company, to advise on the CEO selection process.”
“The Board’s praise for Calvin McDonald, a CEO who has overseen massive value destruction over the past two years, with a 62.8 percent drop in LULU’s share price, shows blatant disregard for its shareholders. In my view, the Board has failed to properly hold management accountable to deliver product innovation and instead has led with complacency. The erosion of premium brand value in the company’s core markets demonstrates that the Board does not understand its target customers anymore or what will drive shareholder value at Lululemon over the long term. I strongly believe in the continued strength of the Lululemon brand, and I know there are several qualified CEO candidates across the retail and apparel space who can continue to build on its legacy. I hope the Board continues this constructive dialogue with me to find refreshed, experienced directors ahead of completing a CEO search.”
Image courtesy Lululemon
