Chip Wilson, the billionaire founder of Lululemon Athletica Inc., has responded to criticism from the company by stating he is looking for a constructive path forward and suggesting a resolution could be reached quickly.
Wilson's Statement on the Dispute
In a statement released on Monday, Wilson expressed optimism about resolving the ongoing conflict with Lululemon's board. "There is no reason why we cannot reach a resolution to this fight quickly," he said. He noted that the board had not provided him with specific details on their disagreements, but as of last Friday, they seemed to be in full agreement on the principal terms.
Negotiations with Chip Bergh
Wilson revealed that he has been in negotiations with Chip Bergh, who is in contention to become a board member. These discussions have focused on a series of proposals, primarily related to the composition of the board. Wilson, one of Lululemon's largest shareholders but no longer holding any formal role, has been advocating for changes to the board, arguing that the retailer needs new directors to navigate a sales slowdown that has impacted the stock.
Lululemon's Response
Earlier Monday, Lululemon rejected Wilson's overtures to install new board members in a letter to investors. The company set a shareholder vote for next month on its preferred slate of directors. Lululemon accused Wilson of harming shareholders with his criticisms and described his nomination of three directors as an attempt to regain influence over the company. "He has been attacking the company and the board for many years, even when the company's performance was stellar," the retailer stated, adding that Wilson holds outdated perspectives about positioning Lululemon and the company's future, as well as troubling conflicts of interest.
Wilson's Commitment to Constructive Dialogue
Despite the pushback, Wilson said he remains "undeterred and willing to be constructive." He emphasized that his experience in the industry is valuable and that he wants to ensure the board has the right skills. "As I told Chip Bergh over email, my hope is simply to have a regular dialogue like any large shareholder," Wilson added.
New CEO and Upcoming Vote
The retailer recently named Heidi O'Neill, a former Nike Inc. executive, as its chief executive officer, effective September. Investors will vote on the three competing board nominees from the company and Wilson on June 25 at the annual meeting. Lululemon argues that its preferred slate of directors is essential to help O'Neill revive growth.
Market Reaction
Shares of Lululemon rose less than one percent in New York trading on Monday. The stock had declined 43 percent this year through Friday's close, compared with an approximately eight percent gain for the S&P 500 Index.
