Lululemon (LULU) Chief Executive Officer Christine Day, who’s been in the CEO office since 2008, announced plans to step down pending the naming of a replacement at the Vancouver, Canada-based yoga clothing maker.
News of the departure send LULU shares plummeting, dropping over 15% in early morning trading.
Lululemon did not provide a reason for the sudden departure, and Day indicated the decision was “a personal decision of mine.” The Wall Street Journal is reporting that Day informed LULU’s Board of Directors on Friday of her decision, citing exhaustion in working 18 to 20 hours per day, and concerns over the travel required over the next 3-4 years while trying to expand the brand internationally.
With Day at the helm of the yoga-inspired athletic outfitter, revenues quintupled, standing at $1.37 billion for the fiscal year end (2012) and earnings have risen over nine times, standing at $271 million. At the same time the stock price has increased nearly 370%.
However problems arose within the past 6 months, as a series of gaffes led to product recalls, stock price declines, and a cutback in its financial guidance for fiscal 2013.
Most notably on the product side, LULU was forced to pull its black Luon yoga pants from the marketplace in March as they were viewed as too sheer. While the issue is almost fully resolved, with LULU already restocking shelves with a new batch of the pants, the problem was an embarrassment for the company.
Day will stay on as CEO until a replacement is found, with no timetable set to this point.
Written by Marc Bastow, Assistant Editor at InvestorPlace.com. As of this writing he does not hold a position in any of the aforementioned securities.