Lululemon's long-standing feud with its founder Chip Wilson is intensifying as the company prepares for a proxy battle over board nominees at its annual general meeting in June.
Competing slates of nominees
The Vancouver-based athleisure retailer has put forward three new board nominees: former Levi's CEO Chip Bergh, ex-Unilever executive Esi Eggleston Bracey, and former Gap chief financial officer Teri List. In a regulatory filing, Lululemon urged shareholders to vote "only" for its nominees and to disregard Wilson's picks.
Wilson, who remains the largest individual shareholder, has proposed his own slate: Marc Maurer, former co-CEO of On Holding AG; Laura Gentile, former ESPN chief marketing officer; and Eric Hirshberg, former CEO of Activision. In a letter to shareholders, Wilson called his nominees "independent, highly-qualified" individuals who would restore Lululemon's "bold vision and product-centred brand."
Divergent visions for the brand
Lululemon's proxy statement argues that its nominees possess "strong executive leadership background, board experience, and extensive expertise spanning global consumer brands" necessary for long-term growth. Wilson, however, contends that the current board has overseen "value destruction" for years.
The relationship between Wilson and Lululemon has grown increasingly bitter after recent management changes. Wilson was openly critical of former CEO Calvin McDonald, who stepped down earlier this year. The company recently named former Nike executive Heidi O'Neill as CEO, effective September 8. Wilson responded by stating, "A near 30-year veteran of Nike is not the symbol of transformative, creative-first leadership that can instill shareholder confidence."
Market challenges
Lululemon has faced sluggish sales growth as competitors like Alo Yoga and Vuori gain popularity. Shares have declined since O'Neill's appointment, falling from US$163.45 on April 22 to US$138.16. The board battle adds uncertainty as the company seeks to revitalize its brand and market position.
Shareholders will decide the board's composition at the June meeting, with both sides campaigning for support.
