Lululemon Stock Has Tumbled Over 50% This Year — Founder Says It’s Like A 'Plane Crash' Fueled By Series Of Mistakes

Lululemon founder Chip Wilson placed a self-funded advertisement in the Wall Street Journal on Wednesday, criticizing the company's leadership for prioritizing Wall Street metrics over product innovation and other missteps that he claims have eroded the brand's appeal.

"Lululemon directors have systematically dismantled the business model and lost employees who help the institutional knowledge that made the company great," Wilson said in the ad.

“Like a plane crash, decline rarely happens because of a single failure, it’s a series of mistakes.” 

The striking — although not entirely unprecedented — move risks becoming a public relations crisis for Lululemon and its CEO, Calvin McDonald, who has been at the helm since 2018.

In similar moves, Starbucks founder and chairman emeritus Howard Schultz publicly criticized the company's direction in a LinkedIn post last year, while Cracker Barrel co-founder Tommy Lowe slammed CEO Julie Masino over her decision to change the company logo.

Wilson argued that Lululemon had several moats when it started out, including a "technical product," sound business model, and sharp marketing. Those were weakened as the company allowed creative talent to slip away and increasingly relied on finance-focused executives who focused solely on delivering on Wall Street's projections.

"Desperate for growth, Lululemon squandered $1B on Mirror and wiped out $10B in market cap with a widely inappropriate Disney collaboration. To squeeze margins further, directors cheapened store design and shifted to non-technical fabrics, eroding the brand's premium positioning," Wilson said.

Lululemon's shares are down 55% year-to-date. Its revenue and profit growth rates have declined consistently over the three years.

To recover, Wilson said the company needs to put the "product and brand back at the center," and empower creative leadership, among other suggestions.

Lululemon was founded in 1998, and its shares were listed on the Nasdaq in July 2007. Wilson stepped down as the chairman of the company's board in 2013 and exited the board entirely two years later, while retaining a stake in the company.

As of early 2025, Wilson owned an 8.6% stake in Lululemon, according to Bloomberg.

Earlier this week, Jefferies lowered its price target on Lululemon to $120 from $150 and kept an 'Underperform' rating. Lululemon's "sky-high" sales per square foot and margins, relative to the mall average and peers, "show substantial downside risk ahead," the research firm said.

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