LULU Board Urges Shareholders To Brush Off Chip Wilson’s ‘Outdated Perspectives’ – Recommends Support For Three Director Nominees

• Bergh was the President and CEO of Levi Strauss, Bracey was marketing officer at Unilever, and List has served as CFO and senior finance executive at Gap and Kraft Heinz, among others.
• Lulu’s board argued that Wilson’s attempt to appoint three alternative nominees could disrupt the company’s progress at a critical time.
• Wilson has also been critical of the board’s appointment of former Nike executive Heidi O’Neill as CEO.

Lululemon Athletica Inc.’s (LULU) proxy battle with founder Chip Wilson intensified this week after the company’s board described his perspectives as “outdated” in a letter to shareholders and urged investors to back its three recommended director nominees.

The athleisure retailer recently attempted to settle its ongoing proxy battle with Wilson, but talks collapsed after what the company described as escalating demands from the founder.

LULU shares were up nearly 1% at the time of writing, putting the stock on course to snap a six-session losing streak.

Chip Wilson’s Perspectives ‘Outdated,’ Says Board

The board said Chip Wilson, who founded the firm in 1998 and left the board more than a decade ago, has repeatedly criticized the company, harming the brand and shareholders. It also argued that his attempt to appoint three alternative nominees could weaken the board’s expertise and disrupt the company’s progress at a critical time.

“The election of these nominees would be an endorsement of the views of a founder with outdated perspectives about how to position the business and future of the company, as well as troubling conflicts of interest,” the letter read.

Alternatively, the board urged investors to support its director nominees — Chip Bergh, Esi Eggleston Bracey, and Teri List.

Bergh was the President and CEO of Levi Strauss for over 12 years; Bracey was formerly the chief growth and marketing officer at Unilever; and List has served as CFO and senior finance executive at multiple Fortune 500 retail and consumer companies, including The Gap and Kraft Heinz.

Wilson Not Sold On Incoming CEO

Last month, Chip Wilson criticized the board’s decision to appoint former Nike, Inc. executive Heidi O’Neill as CEO, arguing that it lacked the expertise needed to recruit a leader capable of driving innovation and keeping pace with evolving consumer trends. O’Neill is expected to join the company on September 8.

“The board's challenges are rooted in a persistent misalignment of governance that perpetuates the cycle of poor leadership selection and talent flight, furthering strategic confusion,” Wilson stated.

“I genuinely hope that Heidi is the right person for Lululemon, but a near 30-year veteran of Nike is not the symbol of transformative, creative-first leadership that can instill shareholder confidence in today's world,” he added.

LULU shares have been on a free fall since the news of O’Neill’s appointment broke. The stock has declined more than 26% in less than a month.

Retail’s Take On LULU

Retail sentiment on Stocktwits turned ‘neutral’ from ‘bullish’ a day earlier.

One user asked investors to ignore the proxy fight and buy the shares instead.

Another user said the stock is starting to look like a classic “hate it at the lows, love it later” setup.

The stock is down 42% year-to-date.

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