Lululemon Athletica Inc. (LULU) founder Chip Wilson voted against the re-election of Michael Casey, who succeeded him as the retailer’s chairman, saying the board has been too concerned with short-term results.
Wilson, who owns 27 percent of Lululemon’s shares, said in a statement today that he also voted against re-electing director RoAnn Costin, a financial investing executive who has served on the board since 2007. The company said both directors ultimately were re-elected at the annual meeting today.
“I have found a palpable imbalance in board representation, which is heavily weighted towards short-term results at the expense of product, culture and brand and longer-term corporate goals,” Wilson said.
The votes indicate that Wilson, who founded Lululemon in 1998, hasn’t been pleased with moves the company has made since he said in December that he would relinquish the chairman role. Lululemon named former TOMS Shoes Inc. President Laurent Potdevin as chief executive officer in January and has been working to regain shoppers’ loyalty after recalling one of its most popular styles of pants last year.
“The Lululemon board of directors and management team have been consistently focused on enhancing shareholder value and will continue to take actions to achieve this objective,” the company said in a statement today. “Contrary to Mr. Wilson’s assertions, Lululemon’s board members are aligned with the company’s core values and possess the necessary expertise to successfully lead Lululemon forward.”
The company said in a separate statement that it would disclose full vote totals of the re-election in a filing.
Lululemon fell 2.6 percent to $44.30 at the close in New York. The yoga-wear seller’s shares have declined 25 percent this year.
Wilson’s opposition to the re-election of Casey and Costin left analysts pondering his motives.
“Both of them have very good experience,” Anna Andreeva, a New York-based analyst at Oppenheimer & Co., said in an interview. “It’s very puzzling and I don’t know what the point of this was. It does seem he has an issue with the board right now.”
The former chairman could be in disagreement about the company’s increased investment to improve its supply chain or its more aggressive international expansion, said Andreeva, who has the equivalent of a buy rating on the shares.
Wilson founded the company after taking a yoga class and built a devoted following for the brand in the U.S. and Canada with unconventional methods, such as local brand “ambassadors” and free yoga sessions.
He said in December he would resign as chairman prior to today’s annual meeting, handing off the duties to Casey, a former Starbucks Corp. executive. Wilson’s involvement in the company may have scared off some potential candidates to replace Christine Day as CEO, Omar Saad, an analyst at ISI Group in New York, said in November.
His decision to resign also followed an interview on Bloomberg Television in which Wilson said Lululemon’s pants “don’t work for some women’s bodies.” He apologized a week later.
The company is scheduled to announce fiscal first-quarter earnings results tomorrow, with analysts on average projecting adjusted earnings of 32 cents a share on sales of $381.3 million, according to data compiled by Bloomberg.