Wilson believes that Lululemon Athletica is now back on track under a new board and management team
The shares of Lululemon Athletica are trading lower after its founder Dennis “Chip” Wilson announced its decision to leave the board of the company.
The stock price of Lululemon Athletica is down by more than 1% to $65.33 per share at the time of this writing around 11:57 in the morning in New York.
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Lululemon is “back on track”
In a statement, Wilson said he is now ready to step down from the board of directors of Lululemon Athletica because he believes that the company is back on the right direction.
“I am happy to say that I now believe the company has returned to the core values that made it great – product, brand and culture – and is back on track,” said Wilson.
Wilson made his decision almost six months after he resolved his dispute with the other directors regarding the strategy of the company. Lululemon Athletica’s brand was damaged after consumers complained that its yoga pants were see-through.
In 2012, Wilson took a sabbatical in Australia. He resigned from his position as chief innovation and branding officer. The following year, Lululemon Athletica was compelled to ask Wilson to return and lead the company again because of the challenges confronting it.
Wilson said, “Upon returning from Australia, I saw that the company had lost its way and was driven by the wrong values. Trying to affect a fundamental shift in direction is hard and I had to raise a strong voice to make myself heard while taking decisive action to implement change.”
Wilson did not like the strategic direction of the company and voted against its two directors including its Chairman Michael Casey last June. At the time, he emphasized that the two directors were focused on short-term results at the expense of long-term strategy. Despite his criticism, the two directors were re-elected.
Following the results of the board election, Wilson and Goldman Sachs explored alternative options for Lululemon Athletica.
Wilson said he achieved his goals for Lululemon
Last August, the board of directors of Lululemon Athletica agreed to settle its disagreement with Wilson after its founder agreed to sell 50% of his stake in the company to Advent International for $845 million.
In exchange, the board of yoga pants manufacturer gave two board seats to Advent International. The board also agreed to review its governance practices.
According to Wilson, “I have achieved the goals I set when I came back, and after careful thought, I believe that now is the right time to step away from the board. I leave behind a new and talented management team and new board construct.”
Last month, Lululemon Athletica increased its guidance for the fourth quarter. The company estimated that it would be able achieve net revenue in the range of $595 million to $600 million, up from its previous guidance of $570 million to $585 million. Its earnings are expected to be around $0.71 to $0.73 compared with its previous guidance of $0.65 to $0.69 per share.
Wilson founded Lululemon Athletica in 1998. He led the expansion of the company to 250 stores worldwide.