After raising a few eyebrows and likely angering potential buyers with his comments, Lululemon (LULU) founder Chip Wilson is stepping down as chairman. A new Lululemon CEO was also announced along with that news.
The Lululemon founder made comments during a recent TV appearance that some women’s bodies “just don’t actually work” for Lululemon yoga pants. Lead director Michael Casey was named as chairman with Chip Wilson stepping down in June.
The new Lululemon CEO will be Laurent Potdevin. He is expected to become Lululemon CEO in January. At that time he also becomes a board member. Potdevin succeeds Christine Day. He was previously president of TOMS Shoes, the company that donates a pair of new shoes to children in third-world countries for every pair of shoes bought. He also served as CEO of Burton Snowboards and LVMH.
As the Financial Post reported, “After managing the company through a recall of overly sheer yoga pants last June which led to a $17.5-million writedown, Ms. Day announced in June that she would leave the company when her replacement was found.”
“We believe Lululemon will benefit from Laurent’s leadership experience and proven track record of success in building global brands,” said Michael Casey, lead director of the LULU board. And execs truly hope it helps. Lululemon has suffered from what many insiders see as a lack of strong leadership for the Canadian company.
LULU stock has had a rough and tumble time in the past year, between the sheer yoga pants and the question marks surround a new Lululemon CEO (via the Financial Post).
In addition to the sheer pants recall, which sparked improved quality control measures but prompted supply chain backlogs and ongoing inventory issues in subsequent quarters, the Vancouver-based company’s image has taken a beating.
As InvestorPlace noted yesterday, LULU stock shareholders actually brought a lawsuit against the company:
Shareholders have accused LULU of hiding the defects of its sheer yoga pants, and of selling its Lululemon pants at a deep-discount in order to protect market share against bigger competitors like Gap (GPS), VF Corp. (VFC) and others. Lastly, the lawsuit claims that that the LULU board hid the fact they were in discussions to replace CEO Christine Day. …In fact, Lululemon stock lost $2.6 billion in two days of trading after Day resigned. And since then, Lululemon stock has regained just 30% of those losses.
…Plus, the fact that founder Chip Wilson sold almost 2 million shares of Lululemon stock at prices greater than $80 in the 30 days leading up to Day’s resignation should make any sane person stop and question the timing of these developments.
In early Tuesday morning trading, LULU stock was up 0.5% … but Lululemon stock is down 7% year to date.