- Chip Wilson says his job is to ‘light a fire’ under Lululemon
- He points to its stock lagging rivals Nike and Under Armour
Lululemon Athletica Inc. founder Chip Wilson, who had a public split with the yogawear maker in recent years, said the company has lost its way and needs a strategy for regaining its edge.
Wilson made the remarks to investors in an open letter, saying he was denied a chance to speak at the company’s shareholder meeting. The 60-year-old said he remains the largest Lululemon owner, with a stake of almost 14.2 percent.
“Our current board and management team must clearly articulate and execute a strategy with urgency towards regaining Lululemon’s competitive advantage and profitable growth,” he said in the letter. “They must take responsibility.”
Wilson slammed Lululemon for failing to keep pace with its athletic-apparel peers, despite a sweeping shift to more casual clothing. Since December 2013, when the current management team took control, Under Armour Inc. has climbed 79 percent and Nike Inc. has risen 45 percent, he said. Lululemon dropped 8 percent during that time,“in the midst of the greatest change in the way people have dressed in the history of the world,” he said in the letter.
“My job is to ask these questions and to light a fire under Lululemon,” Wilson said in a separate interview. “They’ve ceded the market to Nike and Under Armour.”
The shares have made up some of their lost ground in 2016. The stock gained 26 percent this year through the close of trading on Wednesday, compared with a 13 percent drop for Under Armour and a 12 percent decline for Nike. Lululemon shares rose 1.8 percent to $66.17 by the close in New York, roughly where they were before Wilson released his letter.
Lululemon responded to Wilson by citing its “strong operational performance” and saying that it is focused on inspiring customers. The company also said Wilson hasn’t been involved with Lululemon since he stepped down as chairman in May 2014 and from the board in February 2015.
“We have the right board of directors and leadership team in place with the broad and deep expertise necessary to support the execution of our strategic five year plan,” the company said. “This solid foundation gives us the tools to innovate and create as we deliver long-term sustainable growth for all stakeholders.”
Even as he voices displeasure with Lululemon, Wilson harbors little hope of retaking control again. Buying out the company, which has a valuation of $9.1 billion, would be “impossible,” he said. Wilson also said he would never return to the company’s current management team.