Lululemon Sets CEO Exit

Athleisure retailer Lululemon (Vancouver, B.C.) said CEO Calvin McDonald will exit that role at the end of next month, and stay on as an adviser through March. But the board’s plan for replacing McDonald drew heavy criticism from company founder Chip Wilson, who had been agitating for McDonald’s removal for several months.

The news release from the retailer had nothing but praise for McDonald. Said board Chair Marti Morfitt (who is assuming an expanded role effective immediately as Executive Chair): “…During his tenure, Calvin led lululemon through a period of impressive revenue growth, with differentiated products and experiences that resonated with guests around the world. We are grateful for Calvin’s numerous contributions and appreciate his continued support over the coming months to facilitate a seamless transition.”

Those assertions drew a strong rebuke from Wilson, who still retains a major stake in the company.

“… The board’s praise for Calvin McDonald, a CEO who has overseen massive value destruction over the past two years, with a 62.8% drop in Lulu’s share price, shows blatant disregard for its shareholders. In my view, the board has failed to properly hold management accountable to deliver product innovation and instead has led with complacency.

“The erosion of premium brand value in the company’s core markets demonstrates that the board does not understand its target customers anymore or what will drive shareholder value at lululemon over the long term. I strongly believe in the continued strength of the lululemon brand, and I know there are several qualified CEO candidates across the retail and apparel space who can continue to build on its legacy. I hope the board continues this constructive dialogue with me to find refreshed, experienced directors ahead of completing a CEO search.”

As of this posting, the retailer had not responded to Wilson’s comments. Lululemon, which was founded in 1998, sells athletic apparel, footwear and accessories company for yoga, running, training and other activities. It has about 770 stores worldwide, about half of which are in the U.S.