Inside the Lululemon’s founder’s war with the board he says is killing his brand

Lululemon Athletica founder Dennis “Chip” Wilson left the company’s board in 2015, but he has been a thorn in the activewear giant’s side for months, resuming last autumn a years-long campaign in which he has frequently and publicly accused it of becoming a lumbering corporate dinosaur that has lost its edge. Recommended Video Wilson ramped up that pressure in late December by launching a proxy battle to force the departure of three directors who are up for re-election at its next annual shareholder meeting, taking place in the spring, even as it looks for a new CEO. Last month, he went further, saying that in fact more than three directors needed to go. (Wilson himself is not running, saying, “This campaign for change cannot be about me. It is about recommitting Lululemon to genuine creative leadership.”) Wilson’s recent moves have gotten a lot of attention, but it’s hardly the first time he has lobbed this kind of criticism at the company he founded in 1998. A firebrand whose comments have often been seen as exclusionary and even racist, Wilson left the board after tangling with the company’s C-suite over strategy and culture, but he still owns an 8.4% stake in the company. A decade ago, he wrote an open letter in which he made essentially the same complaints he’s making today—only for the company to triple revenue in the following nine years. But this time, Wilson may well be onto something. He certainly is not alone in feeling the company is adrift and has been for a while. The narrative from Wall Street analysts and investors to customers and former executives, is that Lulu has lost the mojo that made it a pioneer in high-end yoga wear for a certain kind of aspirational customer. The innovative spirit and focus on knowing customers intimately seems to have weakened. “Newness in stores was just not where it had been,” one former senior executive speaking on condition of anonymity told Fortune . “You could feel it, going into a store and it wasn’t like, ‘I gotta have this’ anymore.” Jefferies analyst Randal Konik noted last year that Lululemon’s black leggings were much too plentiful at discount outlets, and that markdowns at Lululemon had reached “alarming” levels and created the risk of harming Lululemon’s “premium” image. In a full-page ad he took out in the Wall Street Journal in October, Wilson lamented that Lululemon had “systematically dismantled the business model” that had made it one of retail’s biggest success stories of the century. Wilson and Lululemon representatives declined to comment about the proxy battle, but the company has taken pains to point out that Wilson played no role in Lululemon’s boom of the last decade. “Mr. Wilson has not been involved with the company for a decade, and since his departure, Lululemon has continued to adapt to the marketplace and lead the industry, building one of the most compelling growth stories in retail,” the company wrote in response to Wilson’s announcement he was nominating a slate of directors. Lululemon has said it is engaging in good faith with Wilson, though he has disputed that. Sagging North America sales and a big test of product prowess Next week could give Wilson new ammunition for his claims that “Lululemon has lost its soul”: The company will publish its next set of financial results and is expected to report ongoing weakness in its crucial North American business. Later this month, design critics and retail analysts will be scrutinizing the introduction of a slew of new products in the first collection by global creative director Jonathan Cheung for signs of stagnation or renaissance. (Lululemon has launched a few items already and Wall Street firm Telsey Advisory Group says it sees “green shoots” in those efforts.) A few months ago, activist investor Elliott Management took a $1 billion stake to push for changes in how the company is run and to suggest a new CEO to replace Calvin McDonald, who stepped down in January. Since hitting a peak in late 2023, the company’s shares have fallen by about 68%, leaving Lululemon with a market capitalization of $20 billion. For Wilson’s 8.4% stake, that translates to a $3.3 billion paper loss—so it’s understandable that Wilson is frustrated. He may, however, have engaged in some magical thinking about the company’s trajectory: Wilson has said that he believes Lululemon should have had a $100 billion market cap by 2023—a value that would have been greater than Nike’s. That has clearly not happened. Certainly, there is malaise around the company. Yet for all the talk of a struggling company, Lululemon remains the top athleisure brand in the U.S. by a wide margin, and its business is booming in Asia. At the root of the recent stock plunge is a growing feeling that Lululemon, a brand that essentially invented the “athleisure” craze, has lost its innovative leadership. Though its top line will likely exceed a record $11 billion for the recently ended fiscal year, thanks to a successful China business, its