Lululemon Athletica’s founder, Chip Wilson, announced a proxy battle on Monday by nominating three independent directors to the company’s board. This move comes shortly after the exit of CEO Calvin McDonald, leaving the company without a designated successor. Lululemon has faced challenges in attracting younger, affluent shoppers amidst fierce competition from emerging brands like Alo Yoga and Vuori, as well as pressure from activist investor Elliott Management, resulting in a significant drop in the company’s stock value this year.
Wilson has put forward three candidates for director positions on Lululemon’s board, including Marc Maurer, former co-CEO of On Running, Laura Gentile, former chief marketing officer at ESPN, and Eric Hirshberg, former CEO of Activision. In the interim, the board has appointed Meghan Frank as chief financial officer and André Maestrini as chief commercial officer to serve as co-CEOs while they search for a permanent CEO.
In a statement, Wilson criticized the board for its lack of succession planning and expressed shareholder concerns about the board’s ability to select a new CEO without expertise in the company’s products. McDonald’s departure in January adds to the string of leadership changes in the consumer industry.
Market analyst David Swartz of Morningstar commented that the addition of new board members could help mitigate Wilson’s criticism. While acknowledging the nominees’ qualifications, Swartz highlighted that only one, Maurer, has industry-specific experience at Lululemon. He also speculated that Wilson refrained from seeking a board seat himself due to his substantial stake in Amer Sports, a competitor of Lululemon.
Lululemon has yet to respond to requests for comment. The news was initially reported by The Wall Street Journal.