Lululemon founder Chip Wilson has voiced concerns about the company's current trajectory, stating in a Wall Street Journal ad that the brand is 'losing its soul' and is in a 'nosedive.'

Lululemon founder Chip Wilson has voiced concerns about the company's current trajectory, stating in a Wall Street Journal ad that the brand is 'losing its soul' and is in a 'nosedive.' Wilson attributes these issues to governance decisions and a perceived shift away from the company's founding vision, urging a renewed focus on product, brand, and creative leadership. 

The company's share price has fallen by 65% from its peak, facing its worst performance since 2008. Analysts note that while Wilson's criticisms highlight some valid points, the athleisure market has become far more competitive since Lululemon's inception, with both established brands and new upstarts challenging its market position. The current board includes members with retail and consumer product experience, and some overlap with Wilson's tenure, but the company continues to face significant market pressures.

Lululemon founder says brand is 'losing its soul'

Welcome back. Let's drill down on one retailer, Lululemon. The company's founder, Chip Wilson, taking out an ad in the Wall Street Journal saying the company's in a nosedive and it's losing its soul after nominating a governance committee failed to safeguard the company's long-term vision. So what is the solution for the athleisure maker? According to Wilson, Lululemon needs to put product and brand back at the center, bring entrepreneurship or entrepreneurial ownership, I should say, back onto the board, empower creative leadership over merchants, stop chasing Wall Street at the expense of customers, and recommit to the muse, the woman who inspires the brand. Well, shares are down 65% from their all-time high. They're on pace for their worst year since 2008. For more, let's bring in Courtney Reagan. Court, I want to get your thoughts on this, there was a time where Lululemon was the upstart and the disruptor and made athleisure mainstream, and now there's more competition out there, including a lot of privately held new upstart names. Absolutely. So look, I think some of the points that Chip Wilson makes do make sense, but I think he also is forgetting that when he founded the company, the category was sort of new, it was burgeoning, it was a new idea. He's right, the innovation, the technical fabrics, it was something that the market hadn't seen before. But now, not only is Lululemon competing with the Nikes of the world, but also the upstarts, like the Alos, the Viores, that are trying to take a page from Lululemon's playbook. And he does somewhat address that, talking about sort of the other competitors that are coming in, but he really is very critical of the fact that Lululemon has lost its soul and lost its visionary, saying, you know, when a company becomes bereft of a founder, these things happen. But he does, as you point out, give these points to say, hey, look, you guys can turn things around. And I wanted to look at the board because he exited as CEO well before he left the company entirely and still had a presence on the board. And when I look through it, there are currently 10 members on the Lululemon board, including CEO Calvin McDonald, who's been there since 2018. But there are also three current board members that overlapped with Wilson. So that's about a third of the board that overlapped with him at some point. Six of those members of the board do have experience, personal job experience, in either retail or consumer products, so a CPG type product. Two of those 10 have founded their own company, so are founders in their own right. So when I look at the board, I don't see anything that's extremely off. He points a lot and says, look, there's people that are short term operators and they start to see things sliding and they can do things to sort of make Wall Street happy to juice up the financial results. Yes, Terry List is on the board and she has a lot of experience in retail, largely as a CEO role. And so maybe she had a hand in making sure that the finances were in good shape, which I wouldn't say is ever a bad thing. But to be fair, the stock price certainly has taken a dive. You mentioned down 65 percent or so since it's high. You know, there are some things that can be done, but I think that competition is something that we should seriously point out. And also look at Nike, by the way. Right. They have been a leader in so many areas for so long and they have faltered recently. They have had to change CEOs.

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