Lululemon founder Chip Wilson is worried that the company’s board is running the yoga gear retailer’s business into the ground.
In a strongly worded news release yesterday, Wilson said he voted against re-electing outside directors. Shares are crashing today as Lululemon cut its profit outlook.
Wilson announced his resignation as chairman of the board last year after he came under fire for suggesting that some women’s bodies weren’t made to wear Lululemon’s yoga pants.
In yesterday’s news release, he revealed why he desperately wants a new board for his company, which has been plagued with quality-control issues for the past year (emphasis ours).
I have found a palpable imbalance in Board representation, which is heavily weighted towards short-term results at the expense of product, culture and brand and longer-term corporate goals,” Wilson wrote. “I believe this is impacting the company’s prospects.”
In other words, Wilson feels that the company’s board is more concerned with short-term profits than building a brand.
Wilson continues to hold a 27% stake in Lululemon.
Last year, Lululemon had to recall 17% of its bottoms because they were too sheer.
Even though the company claims to have fixed that issue, customers have complained that the pants pill and shred.
Shoppers who spend $US100 on yoga pants expect good quality, and these incidents have tarnished perception of the company.
In the past year, Lululemon has hired several new executives, including CEO Laurent Potdevin.
But as the company continues to struggle, a board shake-up might be necessary.
Lululemon responded to Wilson’s criticism in a separate release.
“Contrary to Mr. Wilson’s assertions, Lululemon’s board members are aligned with the Company’s core values and possess the necessary expertise to successfully lead Lululemon forward,” the company said.
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