Lululemon founder calls for board overhaul, hints at activist push on CNBC

Investing.com -- Lululemon Athletica Inc (NASDAQ:LULU) founder Chip Wilson has escalated his criticism of the company’s board of directors, suggesting he may work with activist investors to force changes at the athletic apparel retailer.

In a CNBC interview, Wilson, who left the board in 2015, said he has since attempted to help the board but "they wouldn’t listen." He placed blame for the company’s struggles squarely on the directors rather than management, economic conditions, or consumer behavior.

When asked if he would partner with activist investors to push for board changes, Wilson replied: "I think it is time for some action... I’m looking at my options." He added that activists likely didn’t know his position until now, implying his public statements might prompt outreach from them.

Wilson also indicated he has potential board candidates in mind if a proxy fight develops. "Lots of people have approached me," he said, noting he knows many intelligent people in the athleisure sector.

The founder’s comments follow his paid advertisement in The Wall Street Journal criticizing Lululemon’s leadership. In the ad, Wilson argued the company "should have been a $100 billion market-cap company" by its 25th anniversary but instead has seen its "trajectory decline."

Wilson blamed the board for "systematically dismantling the business model" and losing employees with institutional knowledge. He criticized the company’s $1 billion acquisition of Mirror and its Disney collaboration, which he claims "wiped out $10 billion in market cap."

The founder outlined a recovery plan that includes putting "product and brand back at the center," bringing "entrepreneurial ownership back onto the board," empowering creative leadership, and recommitting to the company’s original customer focus.

"Chip Wilson has not been involved with the company for a decade, and he continues to make inaccurate and misleading statements about lululemon, our history, and our Board and leadership team," a Lululemon spokesperson told Investing.com. "We are confident in our ability to capture meaningful growth opportunities ahead and our Board and leadership team remain committed to acting in the best interests of the company and our shareholders.”

"We maintain regular communications with our shareholders to understand their perspectives and communicate our strategy, and our Board of Directors and leadership team continue to take actions to achieve our goal of driving long-term growth and shareholder value creation," the spokesperson added.

Lululemon’s stock has fallen over 50% in the past five years, with more than 38% of that decline occurring in the past year.

This isn’t Wilson’s first public criticism of the company he founded in 1998. Last year, he criticized Lululemon’s diversity and inclusion efforts in Forbes, and in March 2024, he compared the company to Gap Inc. (NYSE:GPS) in a LinkedIn post.

Wilson left Lululemon’s board in February 2015 and reportedly maintains approximately an 8% ownership stake in the company.