Lululemon Founder Picks Fight with Company’s Board

Chip Wilson isn’t happy with the way things are going at Lululemon Athletica, including the stock’s 40% drop in the past year.

So Wilson is considering an activist campaign against the activewear company he founded—something that one analyst says could give shares the boost they desperately need, Sabrina Escobar reported for Barron’s Daily.

Wilson, who left Lululemon’s board a decade ago, has been a frequent critic since. Last week he placed an ad in The Wall Street Journal titled “Lululemon: In a Nosedive.”

The ad said the board has dismantled the business model and allowed institutional memory to leave with departing workers. Wilson contends that the board focuses on Wall Street’s financial projections rather than on product, design, and innovation.

In his words, he wants the board “to put product and brand back at the center” and “to stop chasing Wall Street at the expense of customers.”

A Lululemon spokeswoman told Barron’s that the company communicates regularly with shareholders and that its board and leadership team are acting to drive long-term growth and create value.

It called Wilson’s statements misleading and inaccurate and said the board is committed to the company’s best interests. Wilson and his entities own 9% of Lululemon’s stock—less than a third of his stake before leaving the board in 2013.

He pared back his holdings in part because of agreements with Lululemon to settle disputes. In 2014, he sold half to Advent International for $845 million.

Wilson’s 9% stake is enough equity to give him the voice to launch a proxy fight, says BNP Paribas analyst Laurent Vasilescu, who speculates that Advent, a founding investor in Lululemon, could be open to such a move.