Lululemon Athletica Inc. said its chief executive officer Laurent Potdevin has resigned from the company.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct,” the company said.
The firm didn’t provide any other details, such as where or how its former ceo fell short of the company’s standards of conduct, but sources told WWD that the problem involved a “range of incidents.” And while no one would discuss exactly what had transpired to protect the privacy of the individuals involved, the sources said the behavior or instances “demonstrated lack of leadership.”
Glenn Murphy, in the newly expanded role of executive chairman, said, “Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the board’s most important duties.”
According to the company, the board of directors has initiated a search process for its next ceo.
The company also filed a separation and release in a regulatory filing as part of a Form 8-K with the Securities and Exchange Commission, which detailed an agreement dated Friday between Potdevin and the company.
The agreement said Potdevin, who joined the company in January 2014, “agreed voluntarily to resign his employment with Lululemon for the good of Lululemon, effective immediately.” Under the terms of the separation agreement, Potdevin will receive $5 million in severance. The company also extended his non-compete so that it will now run for a period of 24 months.
In a related move, three senior level executives were promoted and will report to Murphy.
Celeste Burgoyne, executive vice president, Americas, will oversee all channel and brand-facing aspects of the global business, including stores and e-commerce, as well as brand marketing. She joined the company in 2006 to lead the U.S. expansion. Stuart Haselden, chief operating officer, will have oversight for all operations related to finance, supply chain, people and technology. He joined the company in 2015 as chief financial officer, a post that he retains in addition to his new responsibilities. Sun Choe, senior vice president of merchandising, will oversee product development, design, innovation and merchandising. She joined the company as chief global product merchant.
As for his newly expanded role, Murphy will focus on achieving long-term, sustainable results for all stakeholders.