Lululemon founder Chip Wilson heightened his ongoing proxy battle with the company’s board on Friday after telling shareholders in a letter that he is initiating a campaign of “quantum of change” for the athleisure brand.
Wilson has been vocal about the strategic direction of the company as it continues to struggle against rivals in a segment it helped defined in the wake of an ongoing search for a new chief executive.
“The heart of the issue is a disconnect between the Company’s creative engine and the Board’s strategic oversight of how nonquantifiable power of brand and product translates to brand strength, margin durability, and long-term shareholder value,” Wilson said in his letter. “Brand, creative and marketing skills are missing from the boardroom. These problems are fixable, but meaningful change must happen fast.”
In December, Wilson kicked off his proxy fight when he nominated former On Running co-CEO Marc Maurer, former ESPN chief marketing officer Laura Gentile and former Activision CEO Eric Hirshberg to the board while also pushing for the removal of private equity firm Advent from having board influence.
Still, Wilson told shareholders that engagement with the board that he helped facilitate recently has not gained significant traction and the board has rejected his proposal for a committee to review concepts for upcoming products.
“In an effort to spur the conversation forward, one of the candidates I put forward has met with some directors,” Wilson said. “Despite efforts, the Board only engaged with our framework for the first time on February 24, more than 70 days later. The response was weak and insufficient. The Board indicated an openness to some unspecified director refreshment over a period of multiple years and a phased de-staggering of the Board over time.”
Wilson reminded shareholders that Lulumemon stock is now at nearly half of its value from five years ago, representing a $20 billion loss and said that there is an “existing crisis” to find a new permanent CEO following the departure of Calvin McDonald who stepped down on January 31.
Sales at the Vancouver-based brand have tiled near its lowest point since the company went public in 2007 while newer brands like Alo and Vuori resonate with younger buyers in the crowded athleisure wear arena. The segment also faces increased competition from cheaper brands that offer stylish alternatives.
As one of Lululemon’s biggest independent shareholders, Wilson has been wildly vocal about the company he founded. He retired as chief innovation and branding officer at Lululemon in 2013 but has remained as a board member before later stepping down.
In October 2024, Wilson notably blasted the company and McDonald in a full-page advertisement in the Wall Street Journal that criticized the direction of the brand.
