Lululemon Athletica has publicly accused its founder Chip Wilson of making escalating demands that led to a breakdown in settlement talks, according to regulatory filings. The company delayed filing its definitive proxy statement in hopes of reaching an agreement with Wilson, who founded the brand in 1998 and has recently criticized management for losing the company's 'cool' factor.
Key Takeaways
Lululemon has publicly criticized its founder Chip Wilson for making escalating demands that led to a breakdown in settlement talks. The company accuses Wilson of having outdated perspectives and conflicts of interest that could harm the brand's turnaround efforts.
- Lululemon and Chip Wilson failed to reach an agreement despite recent negotiations.
- The company accused Wilson of damaging the brand and having troubling conflicts of interest.
- Wilson proposed installing three directors, including two immediate appointments from his nominees.
- Shares have fallen 62% in the last year due to design missteps and fading brand appeal.
- Lululemon urges shareholders to back its own board nominees.
The athleticwear retailer said Wilson made a significant departure from earlier discussions by proposing to install three directors of his choosing. This included the immediate appointment of two nominees and a third drawn from a pool he selected. He also asked for quarterly meetings with the incoming CEO and several directors, according to Reuters.
Lululemon has urged shareholders to back its own board nominees, including former Levi Strauss CEO Chip Bergh, calling them 'vastly superior' to Wilson's picks. The company has added two new directors in recent months and named former Nike executive Heidi O'Neill as CEO last month as it tries to revive growth and stem losses.
The retailer faces mounting pressure from slowing sales growth, intensifying competition, and investor frustration over its direction. Shares have fallen 62% in the past year due to design missteps and fading brand appeal. Wilson still owns about 8.97% of the company but has been a frequent critic of the brand's leadership.
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