LULU Reportedly Nears Settlement With Founder Chip Wilson In Proxy Fight Over Board Control

• Talks include adding two board seats tied to founder Chip Wilson, with a possible third mutually agreed appointment later.
• Wilson would agree to a two-year non-disparagement pact and cap his ownership stake near 10%.
• The discussions follow a prolonged proxy battle as Lululemon restructures leadership amid falling sales and rising competition.

Lululemon Athletica Inc. (LULU) is reportedly nearing a settlement with founder Chip Wilson that would grant him board representation in exchange for a pledge of non-disparagement from one of its largest investors.

LULU stock closed 0.13% higher and extended gains to 0.47% in after-hours trading. 

Lululemon Weighs Board Expansion With Founder Wilson

The discussions include expanding Lululemon’s board by adding two of Chip Wilson’s nominees, along with a plan to appoint a third mutually agreed director later, according to Reuters. Wilson would also get regular access to incoming CEO Heidi O’Neill.

In exchange, Wilson, who holds an 8.6% stake in the company he founded, would agree to a two-year period of no public or private criticism of Lululemon, with his ownership capped near 10%.

However, no agreement has been finalized yet. 

Earlier Deal Talks Collapsed

The latest talks come just days after earlier efforts to resolve one of the year’s most high-profile proxy fights fell apart, triggering renewed criticism from both sides. In a regulatory filing last week, Lululemon said former board member Chip Wilson holds “outdated perspectives” on the company’s direction and raised concerns over “troubling conflicts of interest.”

Wilson, in turn, has spent months criticizing the company, saying it has lost its “cool” factor and questioning its management. 

LULU Stock: What Stocktwits Retail Sentiment Says

On Stocktwits, retail sentiment for LULU stock turned “neutral” from “bullish” a day ago. Message volume, meanwhile, has been “low.”

The company has a market valuation of $15.2 billion and its stock price last traded around $128. LULU shares have dropped by around 39% year-to-date and nearly 60% in the past 12 months.

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