By Bill Peters
Lululemon says Chip Wilson has 'coveted' the company since he left, and that his vision 'appears to be frozen in time'
Lululemon's stock is down 63% over the past 12 months.
Lululemon is out with a sharp critique of its founder and major shareholder, Chip Wilson, who has spent months publicly attacking the struggling yoga-wear maker.
In a letter to shareholders, Lululemon (LULU) said Wilson's vision for the company was outdated. It also said he has &#34;troubling conflicts of interest&#34; and that his three director nominees lack board experience.
The company urged shareholders to vote for its own three recommended director nominees at its shareholder meeting on June 25.
Lululemon's announcement - its first big attempt at public pushback against Wilson - as well as the filing of proxy materials on Monday, came after efforts to strike a settlement with Wilson broke down this month. The company accused Wilson of being motivated by personal grievances, adding that he was merely trying to retain relevance at the company.
&#34;His vision for [Lululemon] appears to be frozen in time, viewing [Lululemon] through the lens of a founder who has been outside the boardroom for over a decade and away from any operating responsibility within the company for nearly 15 years,&#34; Lululemon said.
The company also said Wilson is trying to &#34;regain increased influence over the company that he has coveted since he left.&#34;
A representative for Wilson said he had yet to comment publicly on the matter. Shares of Lululemon were up around 0.4% on Monday, and were trading at around $119.
However, the stock is down 63% over the past 12 months and well off its high of more than $500 in 2023. The athleisure giant has struggled with tariffs and competition, and analysts have said it has strayed from its core consumers and workout wear.
Analysts have also expressed concerns about Lululemon's new CEO pick, Nike veteran Heidi O'Neill, who will take over the job in September. The company earlier this year suffered backlash against a new lineup of pants deemed by some consumers to be see-through. That followed similar issues more than a decade ago, which prompted Wilson to step down as chairman. He left the board in 2015, although he still has a roughly 9% stake in Lululemon.
Wilson founded Lululemon in 1998. The company, in its letter on Monday, noted that Wilson stepped down as CEO in 2005, when the company had sales of less than $85 million. Lululemon argued that it had grown into a company with $11.1 billion in sales in large part under different leadership.
Lululemon also alleged that Wilson has &#34;significant investment and leadership positions in a direct competitor&#34; to the company, and &#34;recently launched a venture to back and grow future competitors.&#34; The company has said that Wilson had told them that rivals Alo and Vuori &#34;had sought and received his advice, while Lululemon had not.&#34;
A representative for Wilson last month said he &#34;is not and has never been a paid advisor to either Alo or Vuori. He is also not an investor in either company,&#34; adding that, broadly, he is &#34;often approached for advice.&#34;
Wilson's picks for Lululemon's board are Marc Maurer, former co-CEO of running-shoe maker On Holding, Laura Gentile, former chief marketing officer at ESPN, and Eric Hirshberg, the former CEO of Activision Blizzard's Activision segment.
Lululemon's director nominees are Chip Bergh, a former CEO of Levi Strauss (LEVI); Esi Eggleston Bracey, a veteran of companies like Unilever (UL) and Coty (COTY); and Teri List, who has held senior financial roles at companies such as Gap and Kraft Heinz (KHC). Bergh and Eggleston Bracey joined the board this year, Lululemon said, while List joined in 2024.
&#34;We interviewed and spent considerable time with all three of Mr. Wilson's nominees and determined that their appointment would not be beneficial to shareholders and, if elected, would remove critical skills from your board,&#34; Lululemon said in its shareholder letter.
Lululemon also defended O'Neill, saying she had spent more than 15 years leading Nike's apparel segment, and said she had established and built Nike's women's segment into a multibillion-dollar business. Lululemon also said she was an early supporter of Nike's efforts to expand its digital segment. However, analysts have raised concerns about Nike's struggles.
Still, Jefferies analyst Randal Konik said in a note on Monday that Lululemon's stores over recent years had become overrun with patterns like florals and animal prints, with lower-quality fabrics. A product partnership with Disney, he suggested, emblematized its lack of focus.
He also said O'Neill's start in September left a monthslong leadership vacuum, with little clarity on the path forward.
&#34;Our consistent channel checks continue to show one thing: product remains the problem, and it has only gotten worse,&#34; he said.
-Bill Peters
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(END) Dow Jones Newswires
05-18-26 1328ET

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Lululemon has publicly criticized its founder Chip Wilson, claiming his vision is outdated and motivated by personal grievances. The company urged shareholders to vote for its own director nominees over Wilson's picks. Lululemon's stock has dropped 63% in the past year, and analysts express concerns about its new CEO and product quality. The company argues it has significantly grown under different leadership since Wilson's departure in 2005.

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Lululemon hits back at its founder after months of attacks, saying he's just jealous