Last year, Lululemon's founder, Chip Wilson, officially left the brand he created in 1998 (he had his fair share of controversy during his time at the helm). He still owns a part of the brand, though — and he has opinions on how it should operate. If you want Wilson's unfiltered thoughts on the state of the company nowadays, you don't have to look far: He recently published all of them online.
When Lululemon's board of directors barred Wilson from speaking to fellow shareholders at an annual meeting, he decided to take matters into his own hands by publishing an open letter to shareholders on a dedicated site: Elevate Lululemon. Wilson argues that the brand "has lost its way" and is in need of a "call to action." He stresses that he "love[s] Lululemon and its employees" and that "he remain[s] its biggest believer and supporter." However, he's not as confident in current management and how it's handling greater competition in the athleisure space (which Lululemon arguably created — or at least had an instrumental role in growing).
Wilson cites a drop in stock performance compared to brands like Under Armour and Nike (as well as a decline in operating and net income) since current management was put in place as proof that Lululemon hasn't adapted to change as well as its competitors. He also calls for the board to be declassified (which means all members would be up for reelection next year, per the Wall Street Journal), as well as an immediate change in the company's immediate strategy. "As a long-term investor in Lululemon, I am uncomfortable with the lack of urgency, stewardship, and performance of our great company," Wilson concludes.
Wilson's time at Lululemon was chronicled pretty publicly. In December 2013, after holding a few different titles at the company, it was announced that Wilson would step down from his role as non-executive chairman at Lululemon the following summer. In February 2015, he left the brand's board of directors, but retained stake in the company, per WWD.
Wilson is still the company's largest owner, with an almost 14.2% stake in Lululemon. His family has since launched another apparel venture, Kit and Ace. So, why speak out on the state of leggings now? Well, for one, Wilson is finally out of a two-year non-disparagement agreement he signed with Lululemon when he sold half of his shares in 2014. "Part of my deal I made with the board was not to say anything about the board for two years, and those two years are up now," Wilson told BuzzFeed.
In a statement obtained by Refinery29, a spokesperson for Lululemon stressed that Wilson has no involvement with the brand and that the company plans on sharing its most recent results at an earnings call next week. "As evidenced by our strong operational performance, we have the right board of directors and leadership team in place with the broad and deep expertise necessary to support the execution of our strategic five year plan," the company statement reads. "This solid foundation gives us the tools to innovate and create as we deliver long-term sustainable growth for all stakeholders. We remain focused on our commitment to inspiring our guests in their sweaty pursuits and bringing the best of Lululemon to communities around the globe."
A day after the letter was published, Under Armour officially announced its stake in this fitness-as-leisurewear space with a new fashion-focused, premium sportswear line helmed by Tim Coppens. Despite the fact that Ben Pruess, Under Armour's senior vice president of sportswear, told Business of Fashion that this new line will be neither activewear nor athleisure, its launch proves this in-between category is hotter than ever — and we can expect more brands to get in on it. Lululemon's net revenue for 2015 was up 15% from the previous fiscal year, according to its last earnings report. The brand's upcoming earnings call, scheduled for June 8, should be pretty interesting...