When your company founder launches a proxy fight against you, it's generally not a vote of confidence. Lululemon Athletica Inc. (LULU) is learning this the hard way as Chip Wilson, who started the athleisure empire and remains one of its largest independent shareholders, is pushing to remake the board with three new directors.
Wilson's timing is pointed. He made his move Monday, right after Lululemon announced that CEO Calvin McDonald would be stepping down following a rocky seven-year run. The company hasn't named a replacement yet, which is part of Wilson's complaint. He doesn't think the current board is equipped to pick the right person.
"Shareholders have no faith that this board can select and support the next CEO without input from a board with stronger product experience," Wilson said in a statement. "This is the only way to restore shareholder confidence and set lululemon back on the path to growth, product innovation and premium quality."
Heavy Hitters Join the Fight
Wilson isn't fighting alone. Elliott Investment Management, which holds a $1 billion stake in Lululemon, is reportedly backing the overhaul. According to The Wall Street Journal, Elliott is pushing for Jane Nielsen, a former Ralph Lauren executive, to become the next CEO. When an activist investor with that much firepower gets involved, boards tend to pay attention.
The three nominees Wilson is putting forward bring serious credentials. There's Marc Maurer, former co-CEO of On Running; Laura Gentile, who served as ESPN's Chief Marketing Officer; and Eric Hirshberg, the former CEO of Activision. Wilson believes these executives bring the kind of product and creative experience that Lululemon's current board lacks.
For its part, Lululemon said the board has "long engaged" with Wilson and communicated the company's strategy. Now that his nominees are formally submitted, the board will review them through its standard governance process. Translation: We hear you, but we're going to take our time with this.
A Familiar Pattern
This isn't Wilson's first rodeo with board battles at the company he founded in 1998. He stepped down as CEO back in 2005 but has remained an outspoken voice on the company's direction, frequently criticizing everything from its diversity initiatives to what he sees as excessive bureaucracy.
The history here matters. Wilson stepped back from daily operations in 2012 and resigned as chairman in 2013 after a recall of see-through yoga pants created a public relations nightmare and led to executive departures. He left the board entirely in 2015 after clashing with directors over strategy.
That earlier proxy fight was avoided when Wilson agreed to sell roughly half of his 27% stake to private equity firm Advent International. In exchange, he got two additional directors appointed to the board. Now, a decade later, he's back with similar concerns about leadership and vision.
The Numbers Tell a Tough Story
Shares of LULU were up 0.45% at $213.50 during premarket trading Tuesday. But zoom out, and the picture gets uglier. The stock has plummeted over 40% in 2025 as Lululemon struggles to attract younger and affluent shoppers while facing stiff competition from fast-growing newer rivals.
Market data shows the stock displays strong value characteristics, though momentum and quality metrics lag. There are positive short- and medium-term price trends, but the long-term outlook remains weaker. That's the kind of mixed bag that makes shareholders nervous and founders restless.
Wilson clearly believes the company has lost its way and that fresh board leadership with deeper product expertise is essential to finding the right CEO and getting back on track. Whether current directors agree or whether shareholders will force their hand remains to be seen. But with Elliott's billion-dollar stake backing the push and the stock down sharply, this fight is just getting started.