Spat Escalates Between Chip Wilson and lululemon

Lululemon Athletica Inc. founder and major shareholder Dennis “Chip Wilson” has gone public with his arguments for replacing three members of the athleisure brand’s board. Hours after Wilson released his statement, lululemon responded by saying he “has been unwilling to have a constructive dialogue toward a reasonable resolution.”

At the heart of Wilson’s dissatisfaction with the board currently guiding lululemon: “Brand, creative and marketing skills are missing from the boardroom,” he said. To help fill that void, he wants to nominate these three executives to the board:

• Marc Maurer, former Co-CEO of On Holding AG.
• Laura Gentile, former Chief Marketing Officer of ESPN.
• Eric Hirshberg, former CEO of Activision Publishing Inc.

Wilson, who exited the company he founded about a decade ago and retains a 9% ownership stake in its stock, also expressed unhappiness with what he characterized as the existing board’s “inadequate engagement to date.”

In response, lululemon’s said: “We have continued to engage with Mr. Wilson in good faith over the past few months, including numerous meetings, with the goal of having a productive dialogue with him. We disagree with Mr. Wilson’s characterization of his interactions with the board…

“The board remains open to engaging with Mr. Wilson as well as the company’s other shareholders and will continue to take actions that we believe are in the best interests of all of the company’s shareholders.”

In its coverage of the fracas, Barron’s noted that Wilson isn’t the only activist pushing for change at lululemon, whose sales and stock price have both languished in recent years. “Elliott Investment Management took a $1 billion stake and is pushing for Jane Nielsen, Ralph Lauren’s former CFO, to be the next chief executive after CEO Calvin McDonald stepped down in January,” the financial newspaper reported. “A search for his successor is under way.”

It was that situation CEO that precipitated Wilson to proxy campaign, Barron’s said. “He has said Lululemon shareholders won’t trust any CEO picked by the current board,” it reported.

Should Wilson wind up getting his slate of candidates nominated for election to the board, results of that vote would be disclosed at lululemon’s next annual meeting, which is likely to be held this June.