It’s the kind of story you can’t make up. Chip Wilson, founder and largest shareholder of lululemon athletica penned an op-ed this week criticizing lululemon’s “virtual” annual meeting, titled “Lululemon’s Anti-Shareholder Meeting.”
Wilson lauded Walmart for its recent rousing employee and shareholders’ annual meeting (not to mention its June 3rd full-day annual Investors Day meeting) where the CEO and CFO reviewed financials, goals, progress and issues, while lambasting lululemon CEO Laurent Potdevin and his team for its secretive annual meeting.
Wilson complained in The Globe & Mail, “Like other companies facing tough questions from shareholders, lululemon chose to conduct “a completely virtual annual general meeting of stockholders”, via a voice-only webcast.”
Lululemon’s financial results for Q1 2016 include net revenue increase of 17% to $495.5 million while the company ended the quarter with $550.0 million in cash. On its earnings call with analysts, the company’s executives did reveal more details — such as sharing that it’s not all about $100 yoga pants, but also making men converts through collections like the ABC (“Anti–Ball-Crushing”) line which was introduced in 2014.
Wilson’s op-ed continues, “The misnamed “meeting” lasted all of 20 minutes and lacked any transparency. Shareholders couldn’t personally ask questions. Questions had to be previously submitted by email. They were then vetted and read or recast by the board. Only four “softball” questions acceptable to the board were selected and addressed. It was a perfect example of how unresponsive lululemon has become to its shareholders.”
As irony would have it, Wilson has a long history of controversial opinions and behavior including his relationship with current CEO Potdevin, former CEO Christine Day, shareholders and consumers.
The brand made headlines in 2013 after pulling its proprietary ‘luon’ yoga pants off shelves due to “sheerness” but fueled a backlash from consumers for a lack of responsiveness and outreach. Lulu addressed the “shortage” of black yoga pants after pulling them from stores and the website (refusing to call it a “recall”) and emerged relatively unscathed from the “transparency” crisis, due in part to its cult-like culture and brand story that preaches a type of mind, body and soul manifesto, and Day took the fall and announced her departure.
In addition to running a new apparel lifestyle brand in Kit and Ace, Wilson still owns 14% of the athleisure company in a stake valued at about $1.35 billion and he says rivals including Under Armour and Nike are beating the company at its own game and the board and Potdevin are to blame. Wilson states the value of Under Armour has increased 79%, Nike is up 45% and lululemon stock has dropped 8%.
“Our board needs to be thinking like Tesla and how we can create a brand, product, market and connectivity with our customer that is unique in a sea of apparel alternatives,” continued Wilson.”The bar is how lululemon owns the next decade in the biggest change in the way people will dress in the history of the world.
“I hope the company’s board will be more transparent, responsive and not combative with me in making this happen. This board should be aligned with the creation of shareholder value, not at odds with it.”
Turns out there’s one ball-crusher that Lululemon still has to deal with these days—its founder.
— lululemon men (@lululemonmen) June 9, 2016