Lululemon Athletica Inc. founder Chip Wilson’s unsuccessful attempt to shake up the board at the company’s annual meeting last week was apparently just the first salvo in a campaign to redirect the firm he founded 16 years ago.
This story first appeared in the June 24, 2014 issue of WWD. Subscribe Today.
The embattled yoga apparel maker’s shares Monday rose $1.02, or 2.5 percent, to close at $41.25 on indications 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, failed in his effort to unseat non-executive chairman Michael Casey and director RoAnn Costin from their seats on Lululemon’s board at the firm’s annual meeting in Vancouver on June 11. He did not contest the reelection of Laurent Potdevin, who succeeded Christine Day as chief executive officer of the firm following a search in which Wilson was personally involved.
At the meeting, 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.
Shares rose Monday following a report in the Wall Street Journal that Wilson had retained Goldman Sachs & Co. with an eye to a board shake-up or possible buyout with private equity partners. Goldman and a spokesman for Wilson have declined comment. Citi analyst Oliver Chen said an acquisition by a strategic buyer would likely fetch between $51 and $63 a share.
Wilson said prior to 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.”
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.