Lululemon Is Having an Identity Crisis. Its Founder Blames the CEO.
The athleisure brand’s estranged founder, Chip Wilson, is telling anyone who will listen how the current leadership is messing up
- Lululemon’s U.S. sales are declining, and its stock price has fallen more than 50% this year, wiping out over $25 billion in market value.
- Founder Chip Wilson, the largest individual shareholder with an 8% stake, publicly criticizes CEO Calvin McDonald’s leadership and strategic decisions.
- CEO Calvin McDonald acknowledges some product predictability but states he is addressing issues by adding new products and slashing production cycles.
Under Chip Wilson, Lululemon LULU 1.23%increase; green up pointing triangle Athletica rose to fame on leggings so functional and flattering that women wore them not just to the gym but to brunch, the supermarket and practically everywhere else.
Now, trendsetters are wearing Alo Yoga matching workout sets or Vuori joggers. And Wilson, the estranged founder of the 27-year-old brand, isn’t happy about it.
He has been publicly trolling the board and Chief Executive Calvin McDonald, likening their mistakes to a plane crash. He has blamed the “loss of cool” on the kind of CEO who can “speak Wall Street” but is killing innovation. While Wilson hasn’t held an official role at Lululemon in over a decade, he lives near the company’s headquarters in Vancouver, British Columbia—and stays in touch with employees.
On some counts, Wilson isn’t wrong: Lululemon’s U.S. sales are declining as the athleisure “it” label loses its sheen. The stock price has fallen more than 50% this year, wiping out over $25 billion in market value—including roughly $2 billion of Wilson’s holdings. Some shoppers say the brand is having an identity crisis.
McDonald, who has been CEO since 2018, is running a very different company than the small retailer that Wilson started. Annual profit has grown sevenfold since Wilson was last on the board in 2015, and there are now more than twice as many stores. McDonald is focused on maintaining that growth across the more than 780 stores, upping the quotient of new styles and bringing products to market faster.
In some ways, the unfiltered, 70-year-old Wilson is the polar opposite of McDonald, a 54-year-old, buttoned-up former beauty executive.
Wilson has been railing against Lululemon’s leadership on LinkedIn for much of the past year and took out a full-page ad in The Wall Street Journal last month to complain. He’s an extreme case of a phenomenon that has an official name: post-founder syndrome. The founders of Nike and Starbucks publicly criticized their creations’ perceived stumbles, enough so that new executives were hired.
In the ad bashing Lululemon, Wilson wrote that “finance focused CEOs don’t know how to attract or motivate creative talent, and even worse, they think they understand great product when they don’t.” What Lululemon is missing, he suggested, is someone like himself: “A company bereft of a visionary loses its singular voice for product and long-term strategy.”
Wilson remains the company’s largest individual shareholder with a roughly 8% stake, now worth about $1.8 billion.
He has crossed swords over Lululemon’s ill-fated acquisition of at-home fitness startup Mirror, which it purchased for $500 million in 2020, and stopped selling three years later. He has taken issue with partnerships Lululemon formed to sell products emblazoned with Mickey Mouse or the Kansas City Chiefs logo. (McDonald sits on Disney’s board and said the collaboration was a one-time event, while the sports league partnerships help reach new customers.)
Wilson also voiced his displeasure at Lululemon’s expansion into new non-workout categories, posting about his “sadness for lululemon’s slow march to becoming The Gap with cheap acrylic sweaters.”
McDonald didn’t know the Oct. 7 ad in the Journal was coming.
In an interview, he said he agrees with some of Wilson’s points. “Parts of our product [offering] have become predictable, and we need to focus on innovation and creativity at an accelerated rate,” McDonald said.
But he said he had already started to address issues, such as softening U.S. sales, by adding new products and slashing production cycles, before Wilson went public with his criticisms. He wants Lululemon to stay focused on activities like running, yoga, tennis and golf but sees opportunities to expand selectively into lifestyle and casual items.
“He hasn’t been involved with the business in any real capacity for over 10 years,” McDonald said. McDonald and Wilson have met in person and speak by phone, much the way McDonald communicates with other large shareholders, according to a Lululemon spokesman.
McDonald “is misguided if he believes I have not been involved in the company in the last 10 years,” Wilson wrote on LinkedIn last year. His spokeswoman, Andrea Mestrovic, says he stays attuned to what’s happening at the company.
Wilson and McDonald also disagree on who the Lululemon muse should be. Wilson wants the company to go back to its roots and design for the Super Girl, a young, educated, working woman. McDonald wants his team to focus on the Mindful Athlete: goal-oriented, active people who mix and match athletic and lifestyle apparel.
Wilson declined to be interviewed. Mestrovic wouldn’t say whether he planned to launch a proxy fight to unseat directors.
“He hopes for a reformed board that is infused with people who are entrepreneurial, creative, have technical apparel experience, lead with innovation, and have a founder mentality,” said Mestrovic.
After creating the $100 leggings that earned a cultlike following, Wilson stepped aside as CEO in 2005 when he sold 48% of the company to private-equity firm Advent International. Lululemon went public two years later.
Wilson remained chairman and held other roles including chief product designer. His meddling created friction with Christine Day, who became CEO in 2008. Wilson was given guidelines by the board that included, “Don’t give people advice unless they ask for it,” and, “Work through the CEO, not around the CEO,” the Journal reported at the time.
In 2013, he suggested in a TV interview that sheerness and pilling problems with Lululemon pants were the fault of its customers. “Quite frankly some women’s bodies just actually don’t work for it,” he said. Later that year, he apologized and stepped down as chairman.
He left the board entirely in 2015 and said he thought the company was on the right track.
In the ensuing years, however, Wilson watched the company make what he considered misguided decisions. Last year, he wrote that he chose to leave the board because he didn’t feel that he could speak up against directors and the CEO.
Wilson “is telling the story not just of Lululemon, but of many companies who lose their visionary founder,” said Mickey Drexler, who as CEO steered Gap and J.Crew through many successful years but left after sales slumped. He has experience with the tensions between prioritizing creative talent and pleasing Wall Street, and is now chairman of the Alex Mill clothing brand his son founded.
“Bigger is not always better and becoming preoccupied with quarterly profits and the stock price over creativity speaks to problems at most big corporations in America,” Drexler said.
Wilson’s comments have resulted in an outpouring of support from some current and former employees. But the fight is also creating two camps with different loyalties.
Josh Nash, who worked in roles including as a Lululemon brand ambassador, store employee and most recently a project manager in marketing technology before leaving in 2023, said Lululemon needs to refocus on quality and technical expertise and stop expanding into new categories like sweaters.
“They’ve lost the plot,” he said.
But Dan Stevens, who led Lululemon’s store development for nearly a decade until he left in 2018, posted on LinkedIn that Wilson should cut the current team “a little slack.” In an interview, he said: “It’s easy to romanticize the golden days.”
Since leaving Lululemon, Wilson manages the family’s holding company, which has a large stake in Amer Sports, owner of outdoor clothing maker Arc’teryx and other brands.
Wilson has raised more than $500 million over the past 18 months by borrowing against his Lululemon stock, according to regulatory filings.
Much of Lululemon’s growth has happened on McDonald’s watch, and the brand still dominates the athleisure market it helped create. Since McDonald left Sephora to become Lululemon’s CEO in 2018, annual sales have more than tripled to $10.6 billion.
Part of that growth came from opening new stores, including in international markets. Lululemon also grew its men’s business and expanded further into new categories, such as tennis and golf.
Recently, sales have stalled in the Americas, its biggest market, accounting for two-thirds of net revenue. Comparable-store sales haven’t grown in the region since the quarter that ended in January 2024. In September, Lululemon cut its 2025 sales outlook.
As new competitors such as Alo and Vuori started siphoning Lululemon’s customers, it played catch up. It was late to trends such as color-coordinated bras and leggings and looser-fitting workout clothes. McDonald acknowledged that certain collections such as its Scuba and Softstreme lines had grown stale.
Shoppers noticed.
When you walk around Vancouver today, every girl is wearing Alo,” said Arezo Zarrabian, a 41-year-old Vancouver resident who once counted herself as a loyal Lululemon customer. In the past few years, she started buying her leggings at Alo.
Lululemon items like the crossbody bags and men’s ABC (anti-ball-crushing) pants—named so because of a stretchy gusset panel in the crotch—have become wildly popular outside the gym.
But some shoppers are puzzled over garments more appropriate for the office.
“I don’t want to buy skirts and sweaters from Lululemon,” said Zarrabian, who works as a crime analyst.
At one point this month, more than 1,200 items were discounted on Lululemon’s app, according to Jefferies analyst Randal Konik. Three to four years ago, 90% of its products sold at full price, he said.
Quality issues have also cropped up. Lululemon’s Breezethrough leggings were so poorly received by customers, who said the fabric was too thin and the V-shaped seam lines were asymmetrical and unflattering, that it stopped selling them weeks after their July 2024 introduction.
Lululemon says that markdowns are similar to those in 2023 and 2024 and that only 1 out of 200 items are returned for quality issues.
Last year, McDonald reorganized his leadership team as part of a push to cut the two-year product-development cycle roughly in half. He has also vowed to boost new styles to 35% of the assortment by the spring, up from 23% currently.
That’s when the real test will come—when the first products designed by new creative director Jonathan Cheung hit shelves.
“We know why we’re here and what we’re focused on,” McDonald said. “People inside the company see the areas of opportunity.”
