Lululemon founder Chip Wilson launches proxy fight to remake board of directors

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From the Street Lulu Lemon founder, Chip Wilson, is launching a proxy fight at the Athleasure company in an effort to shake up the board, nominating three director candidates, including the former co-CEO of On Running, a former ESPN chief marketing officer, and former Activision

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CEO Eric Hirschberg. Wilson is not trying to put himself back on the board, although he does remain Lulu's second biggest shareholder, nearly 9% stake, 10 million shares, and has long complained about the performance of Lulu Lemon. This year, it's down 45% and Sales have

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stagnated. They They were growing above the industry for several years. Um, it's gone through a number of CEOs since Wilson himself stepped down as CEO. And now he wants to shake up the board. He also wants a proposal where shareholders would have to vote annually on

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reappointing all the directors. Something he said is more common practice at other S&P 500 companies. I'm just looking Lulu Lemon has something online on its website that Alo Yoga does not have, which is a big sales section. And that is often indicative of, you know, And why is

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that? What what what specifically

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is it about some of these newer brands that they've been able to mount such a challenge to when It's a competitor like that. It's very simple. It's tapping into what the

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consumer wants right now. And and at the right price point of doing it as well. I think Lulu Lemon has has been considered to have the same black yoga pants for very high price for a long time and there hasn't been a lot of innovation around that. I think Alo's done a better job

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lately with the assortment, but it's not just Alo, it's Viori, which has also taken a lot of market share on the athletic apparel side and a lot of other brands too getting into athleisure as that's become a way of life. So it's gotten to be a crowded crowded place and and Lulu,

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which was always so good at understanding its customer and catering towards customer just hasn't offered as much, you know, the style change. Women wanted baggy or pants, for instance, not tight leggings and Alo did a really good job at doing that, for instance and not just the

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yoga leggings. Lulu has a little bit more of that online, but not not the same. So just it's about style. And for a long time under Calvin McDonald, they didn't even have a chief design officer at Lulu Lemon. They waited a long time to rehire that. So all of this Chip Wilson

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says is not just management, but it's the board. And one example is, you know, Calvin McDonald stepped off as CEO a few weeks ago because of the underperformance. Where was the succession plan? You know, it's it's it's a little unusual that they're now searching for a CEO. One

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reason perhaps why Elliot has a billion dollar stake and is pushing Jane Nielsen, a former CFO of Ralph Lauren to be the CEO. Yeah.

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Um no, listen, we we talk about it obviously, boards are important. They can lose their way and it's it's never completely clear what happens in that board room. How much information they truly while they are entitled to everything, how focused are they? Right. And you know, and

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or what are they really reading and doing and are they just being fed conceited what How active they are what the CEO wants them to? I mean, these were all questions that obviously activist raised many years about boards and and their function.

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Yeah, and and this board if you look at it, I mean it's it's no it's it's not necessarily names you would recognize, not a lot of CEOs on the board, but there are some CEO COOs and a lot of people who have had a lot of experience in retail, which maybe was a good thing, you

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know, when when things were good. Um but it but judging by some of the picks that Wilson has, it's more people who are sort of in in tune more recently with big cultural moments and really capturing the zeitgeist. Right. Ultimately for fashion that That's what you need. I

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know, but who's going to sit in that board room and raise their hands say, "I think we're losing our way." in terms of community You can say I think I think you know understanding what the consumer is I know you

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I should think you know I think I think what they're doing is more interesting. I think, you know, we need we need celebrities, we need brand ambassadors, all all sorts of ideas. Yeah. Put me on the board.

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It'd be good. You will eventually be a board member one day, but you got a lot more ahead of you as a German I'm first I'm

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good I'm glad I'm happy I'm seeing

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it for you 20 years down the road Okay And for

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you 20

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Let's just hope I'm here. You've got plenty of time.