Lululemon Athletica’s founder, Chip Wilson, announced on Monday that he has initiated a proxy battle by nominating three independent directors to the company’s board. This move comes shortly after the Canadian apparel brand revealed the departure of CEO Calvin McDonald without a clear successor in place.
Facing challenges in attracting younger and affluent consumers amidst tough competition from emerging brands like Alo Yoga and Vuori, as well as pressure from activist investor Elliott Management, Lululemon has seen a significant decline in its stock value this year.
Wilson’s nominations for the board include 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 the search for a permanent CEO continues.
Expressing dissatisfaction with the board’s handling of CEO succession, Wilson stated, “Shareholders lack confidence in the board’s ability to choose and support the next CEO without the insight of a more experienced product-oriented board.” McDonald’s departure in January adds to the series of leadership changes seen in global consumer companies and retailers.
Analyst David Swartz from Morningstar commented that the addition of three new board members could pacify Wilson’s criticisms towards the board. While the nominees bring diverse expertise, only one, Maurer, has industry-specific experience at Lululemon. Swartz also speculated that Wilson refrained from seeking a board seat, given his significant ownership in Amer Sports, a competitor of Lululemon.
Lululemon has not responded to requests for comment. The initial report was published by The Wall Street Journal.