Lululemon Founder Chip Wilson Launches Boardroom Battle

Inside the Lululemon Proxy Fight

VANCOUVER—Chip Wilson, the outspoken founder of Lululemon Athletica, has opened a new front in his long-running feud with the company he built from a single yoga-wear stall.

The Shot Across the Bow

In a letter filed with regulators Monday, Wilson’s private investment vehicle, Hold It All Inc., demanded a special meeting to replace four directors, citing “stagnant innovation and eroding brand cachet.” The move sets up the most aggressive proxy contest the athletic-apparel sector has seen since Under Armour’s board overhaul in 2019.

We love this brand; that’s why we can’t watch it drift, Wilson wrote to shareholders. Leadership needs skin in the game and a clear vision for technical product.

Why Shareholders Are Listening

Wilson, who controls about 9 % of the company’s super-voting shares, argues that Lululemon has ceded ground to Nike, Vuori, and upstart brands in the crucial men’s and footwear categories. Third-quarter numbers appear to back him up: same-store sales growth slowed to 5 %, down from 16 % a year earlier, while inventory swelled 24 %.

• Men’s line now accounts for barely 22 % of revenue, below the 25 % target set in 2021.
• International expansion is lagging; Asia revenues grew only 8 %, half the pace of 2022.
• Gross margin compressed 180 basis points, pressured by air-freight costs tied to supply-chain snarls.

The Board’s Counter-Punch

Directors responded swiftly, saying Wilson’s proposals would “destabilize momentum” just as new CEO Calvin McDonald executes a five-year plan. The company mailed its own slate—three incumbent directors plus former PepsiCo executive Lori Tauber Marcus—touting record revenue of $8.1 billion last fiscal year.

Glass Lewis and Institutional Shareholder Services are expected to issue recommendations next month; major index funds Vanguard and BlackRock together control roughly 17 % of the vote.

Market Reaction

Lululemon shares, already down 18 % since January, jumped 6 % intraday on speculation that Wilson could push for a sale or strategic review. Options volume tripled, with the highest open interest at the $340 strike expiring Friday.

What Happens Next

Shareholders of record on May 15 will vote at the virtual meeting slated for July 10. If Wilson secures majority support, the board would flip overnight, opening the door to spin-offs, real-estate sales, or even a go-private transaction, analysts say. Failure, however, could see the founder divest his stake, removing the last family influence over the brand he named after a Japanese Toyota marketing slogan.