Board drama at Lululemon
Lululemon founder Chip Wilson has voted against the re-election of Michael Casey and RoAnn Costin to the company’s board of directors.
Wilson founded the company in 1998, and has seen it evolve through many business cycles, expanding it from a small storefront in Vancouver to an international brand with more than 250 stores.
“After being asked by the board to come back from Australia to help the company recover from the product recall last year, I have decided to vote against the re-election of the company's outside board members,” said Wilson. “While I am excited about the new management team that I helped put in place, I am concerned that the Board is not aligned with the core values of product and innovation on which Lululemon was founded and on which the company thrived. As a 27% shareholder in the company, I believe change is now needed at the Board level to increase shareholder value.”
According to Wilson, the board is heavily weighted toward short-term results at the expense of product, culture and brand and longer-term corporate goals.
“I believe this is impacting the company's prospects. My vote today sends a signal to the financial community that the company must address this imbalance if Lululemon is to fully recover," added Wilson.
Michael Casey, a former Starbucks executive, recently rose to chairman of the board from lead director after Wilson announced his resignation as chairman to focus on other ventures including Whil, Imagine1Day and the Chip and Shannon Wilson School of Design at Kwantlen University. RoAnn Costin is president of a private Boston-based equity company that focuses on investing in early and expansion-stage consumer product and retailing companies.
The company has since issued a response to Wilson, stating in a press release that the 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 board’s commitment to the value and reputation of the Lululemon brand and the constant focus by the board and management on the company’s mission and core values is critical to enhancing long-term shareholder value.”
The board added that contrary to Wilson's assertions its members are aligned with the company’s core values and possess the necessary expertise to successfully lead the company forward.
“The board is overseeing Lululemon’s strategy to strengthen the company’s foundation, focus its product engine on innovation and accelerate sustainable and controlled global expansion. By leveraging its design-led roots, strengthening its supply chain and providing an exceptional guest experience, we are confident that Lululemon, under new CEO Laurent Potdevin’s leadership, will provide guests with the high-quality, technical products they know and love and create value for shareholders,” the board said.