Lululemon Shares Up as Founder Mulls Shake-up
Shares of Lululemon Athletica Inc. rose nearly 3 percent in early trading Monday on indications that founder and former chairman Chip Wilson is weighing options to change the company’s management or even its ownership.
Wilson, who holds 27.7 percent of the company’s stock, was unsuccessful in his efforts earlier this month to unseat non-executive chairman Michael Casey and director RoAnn Costin from their seats on Lululemon’s board. He did not contest the reelection of Laurent Potdevin, who succeeded Christine Day as chief executive of the firm following a search in which Wilson was personally involved.
In that election at the firm’s annual meeting on June 11, Potdevin received 118.8 million affirmative votes for his election to the board while Casey and Costin each received 79.7 million votes. Wilson owns 40.2 million shares of Lululemon, according to the company’s definitive proxy filed with the Securities and Exchange Commission in April.
Wilson said on the day of the annual meeting that he is enthusiastic about the company’s new management “that I helped put in place” but was “concerned that the board is not aligned with the core values of product and innovation on which Lululemon was founded and on which the company thrived. As a 27 percent shareholder in the company, I believe change is now needed at the board level to increase shareholder value.”
He characterized the board as being “heavily weighted towards short-term results at the expense of product, culture and brand and longer-term corporate goals.”
Shares rose $1.17, or 2.9 percent, to $41.40 in the first hour of Nasdaq trading Monday on a report in the Wall Street Journal that Wilson had retained Goldman Sachs & Co. with an eye to a board shake-up or possible buy-out with private equity partners. Goldman declined to comment on the report and calls to a spokesman for Wilson weren’t returned Monday morning.
Wilson founded Lululemon in 1998 and only relinquished the chair of the Vancouver-based firm prior to this month’s annual meeting. While hardly as controversial a figure as Dov Charney, the recently ousted founder and ceo of American Apparel Inc., he complicated Lululemon’s public relations difficulties when, in the midst of a recall of its overly sheer black Luon yoga pants last year, he said that the pants weren’t right for “some women’s bodies.”
Wilson’s departure as chairman was disclosed in December at the same time that Potdevin’s appointment as ceo was announced. Wilson remains a director of Lululemon and isn't scheduled to stand for reelection to the board until the company's 2016 annual meeting.