Lululemon Athletica founder Chip Wilson is launching a proxy fight at the athletic-apparel retailer in an effort to remake the company’s board while Lululemon searches for a new chief executive.
Wilson said Monday that he has nominated three director candidates to the company’s board, confirming an earlier report by The Wall Street Journal.
The nominees are former On Running co-CEO Marc Maurer, former ESPN Chief Marketing Officer Laura Gentile and former Activision CEO Eric Hirshberg.
Wilson isn’t trying to put himself back on the board, which might come as a surprise to some given his recent efforts to publicly target the company he started. He remains Lululemon’s second-biggest shareholder, with a nearly 9% stake, according to FactSet. (Vanguard is the largest holder.)
“I know this campaign for change cannot be about me,” Wilson said. “It is about recommitting Lululemon to genuine creative leadership that will re-establish a brand of enduring strength.”
Activist investors often tap former company executives to help them shake up targets, but it is rare to see a founder of a company turning to a hostile approach such as a board fight.
Lululemon said in a statement Monday that its board and leadership team have “engaged extensively” with Wilson for years and that the board offered to evaluate his director nominees privately, but he declined.
The company said it will evaluate Wilson’s board nominees in accordance with its governance process. It also noted it is focused on finding a new CEO with a track record of guiding companies through periods of transformation.
Lululemon is in the midst of an identity crisis and earlier this month said that its CEO, Calvin McDonald, will step down in January. Its stock is down 45% this year, while the broader market has rallied.
Pressure had been mounting for McDonald to turn around the business, including from Wilson, who had been publicly criticizing him and the company for killing innovation and “losing its cool.” Sales have recently stagnated in the U.S., with newer rivals such as Alo Yoga and Vuori eating at market share.
The Journal previously reported that Wilson had tapped financial advisers and was considering waging a proxy battle before Lululemon’s nomination window closes at the end of this month.
Maurer, who stepped down as On Running co-CEO at the end of June, helped build a leading sportswear brand. Gentile founded ESPNW, ESPN’s brand dedicated to women. And Hirshberg oversaw top franchises including “Call of Duty” during his time at Activision, the largest segment of Activision Blizzard.
Wilson isn’t the only one pushing for change. Activist Elliott Investment Management has built a stake of more than $1 billion in Lululemon and is advocating for former Ralph Lauren executive Jane Nielsen to be the next CEO, the Journal reported last week.
Wilson has spoken to Nielsen, people familiar with the matter said.
The founder said Monday that while he understands the urgency to find a new CEO, he believes Lululemon shareholders won’t trust any CEO who is picked by the current board so wants to change the board first.
“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.
Wilson found his inspiration to start Lululemon in Vancouver, British Columbia, after attending a yoga class during the late 1990s. The $100 sweat-wicking leggings quickly developed a cultlike following among women who would wear them everywhere—from workouts to the grocery store.
He stepped aside as CEO in 2005, when he sold 48% of Lululemon to private-equity firm Advent International.
Lululemon went public in 2007 at a valuation of more than $1.2 billion. Advent has since sold out of its stake, though the firm still has a board seat.
Wilson remained chairman and held other roles at the retailer in the ensuing years. Controversial comments around quality control that he made in a 2013 television interview led him to apologize and step down from his chairman position later that year.
Wilson left Lululemon’s board entirely in 2015, later saying that he chose to leave because he didn’t feel that he could speak up against management. Four Lululemon CEOs have cycled through since Wilson left the job.
By the time he departed, Lululemon had nearly 300 retail stores around the world.
Wilson’s experience building brands has led him to other opportunities in retail. In 2019, he was part of a consortium that bought Amer, whose brands include Salomon and Arc’teryx. The company went public last year and its stock is up more than 35% this year, with a market value of over $21 billion.
Write to Lauren Thomas at lauren.thomas@wsj.com
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