Chip Wilson, founder of popular clothing maker Lululemon, will be stepping down as chairman. You may recall his comments last month on Bloomberg TV and then the apology that followed. He will still have a seat on the company’s board of directors. Laurent Potdevin will take over as CEO in January.
Lululemon Founder Stepping Down as Chairman
By Associated Press
Lululemon Athletica Inc. is hoping new faces at the top will help it bounce back from a series of embarrassing issues that have hurt its image.
The upscale yoga clothing maker announced that founder Chip Wilson is stepping down as chairman after raising ire with his comments about the body types of potential buyers of the retailer’s yoga pants. The company also named a new CEO.
Wilson, who founded the company in 1998 and still exerted a strong influence at the company, will retain his board seat.
Christine Day, who had been CEO since 2008 but announced her intentions to leave in June, will be succeeded by Laurent Potdevin. Potdevin, a 20 year-industry veteran, was most recently CEO of Toms Shoes.
Toms has made a name for itself as a socially conscious company that matches every pair of shoes purchased with a pair of shoes given to a child in need.
Potdevin will take over the top role in January and will become a board member at that time. Day is expected to stay with Lululemon through the end of its fiscal year to help with the transition.
The Canadian company named lead director Michael Casey as chairman. Wilson will resign before the company’s annual meeting in June, at which point Casey will assume the role.
The management changes come as the maker of yoga clothing is trying to get in front of a series of quality issues and other embarrassments that have threatened to alienate its loyal followers Those devotees, willing to shell out $100 for a pair of yoga pants, helped Lululemon ring up $1.4 billion in sales last year.
Lululemon has endured complaints about the sheerness of some of its pants, which made them see-through at times. Customers also complained of pilling after a few months of wear â€” or even just a few uses â€” and about holes and seams coming apart.
The retailer pulled one style of its popular yoga pants from store shelves in the spring, blaming sheerness on a style change and production issues. Fixing the problem cost the company millions and made investors question quality control. New pants have since hit stores, but the sheerness complaints have continued, in addition to the new gripes about wear and tear.
Wilson also raised ire with his comments about potential buyers of yoga pants. Wilson said in a recent television interview that some women’s bodies “just don’t actually work” for Lululemon pants. He also said thighs rubbing over time will cause the pants to wear out too quickly.
Wilson did seem to apologize to Lululemon’s workers for the criticism his comments received, but didn’t retract his original statements.
Analysts who follow the company believe Wilson alienated some core customers and potentially opened a door in the lucrative market to rivals like Nike, Under Armour, Athleta and others.
Still, many analysts praised the company’s move to hire Potdevin, who they believe has good experience in building global brands.
“Given the various product and supply chain hiccups the company has undergone this past year, we believe Mr. Laurent will bring a fresh start and new perspective at this retailer,” Jefferies retail analyst Randal Konik wrote in a note to clients on Tuesday.
Wilson’s decision to step out of the chairman role could eliminate the “too many cooks in the kitchen” scenario, he said, and give the new CEO more flexibility to make changes.
Shares of Lululemon Athletica Inc. slipped 8 cents to $70.40 in midday trading Tuesday. The stock is down about 8 percent for the year and has been choppy since March when the company pulled the “see-through” yoga pants off shelves.
Lululemon hired a new product chief in late October, bringing in a Kmart leader to help fill a role left vacant after the see-through yoga pants snafu.
Potdevin became president of Toms Shoes in 2011. He spearheaded the expansion of the brand in 12 countries in the last 12 months. Before that, he spent more than 15 years at snowboard company Burton Snowboards in various positions, and as CEO from 2005 to 2010. He began his career in 1991 at French luxury goods purveyor LVMH.
Copyright 2013 The Associated Press.