The update is the latest step in the battle between Lululemon and its founder, Chip Wilson, who is determined to have the brand embark on a board overhaul journey.
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Wilson currently owns a 8.6% stake in the company, but has not held any leadership role since departing the Board in 2015. He resigned as chairman in 2013 following controversial comments that suggested some customer body types “just don’t actually work” for the brand’s leggings.
In a letter to its shareholders. Lululemon urged the voting of a “white card for” its three recommended directors, Chip Bergh, Esi Eggleston Bracey, and Teri List.
“Building on decades of growth and value creation, the Lululemon Board has taken and continues to take decisive steps to address recent performance with bold actions that position the company for its next phase of success. With a purpose-built, refreshed Board, an incoming CEO with the right balance of creativity and operational discipline, and an outstanding team advancing our strategies with urgency, the company is continuing its forward motion and is well positioned to deliver on Lululemon’s full potential and drive shareholder value.”
The letter highlights Wilson’s exit over 10 years ago as a result of several public controversies and his involvement in a competing business.
“Mr. Wilson has outdated perspectives about how to position Lululemon and the future of the company, as well as troubling conflicts of interest. His actions have been damaging to the brand and harming the very stakeholders he claims to represent: shareholders, guests, and employees. Electing any of Mr. Wilson’s nominees would endorse his misguided perspectives, significantly downgrade the Board’s skills and expertise, and jeopardise the ability of the leadership team and our incoming CEO to effectively build on and accelerate Lululemon’s ongoing action plan at a critical time for the business.”
The company adds that its nominees are proven executives with deep industry expertise and valuable skillsets directly relevant to Lululemon’s business that are vastly superior to Mr. Wilson’s nominees.
In a public response, Wilson said he agreed to the eight principal terms set out by Lululemon and is willing to engage in constructive dialogue with the Board to effect this settlement.
“There is no reason why we cannot reach a resolution to this fight quickly. The Board has not provided me with detail on where our disagreements lie right now, but as of Friday last week, we seemed to be in full agreement on the principal terms. I remain undeterred and willing to be constructive. I am confident in the skillsets of our highly qualified independent nominees that bring unmatched brand and marketing expertise. I stand ready to do what is best for all shareholders of Lululemon with this campaign, be it a vote or resolution with the Board. All shareholders expect us to be practical, collaborative and focused on doing what is right for unlocking value.
“My focus remains on making sure Lululemon has the right skills on the Board, that brand/product expertise is prioritised, and that Lululemon returns to form. The notion that I want to dictate strategy to Lululemon is just wrong. I’m a passionate investor in Lululemon and across the technical apparel space. I feel my experience can be helpful to the businesses I invest in and I am proud of our success. As I told Chip Bergh over email, my hope is simply to have a regular dialogue like any large shareholder.”
