The True Post(Web News) American sportswear brand Lululemon Athletica has once again found itself in the grip of a serious management crisis.
The company’s founder, Chip Wilson, announced on Monday that he is launching a formal proxy fight to restructure its board of directors. The move comes as the company’s leadership crisis deepens after the abrupt resignation of Chief Executive Officer Calvin McDonald.
Lulu Lemon announced two weeks ago that CEO Calvin McDonald would step down in January, but the company has not named a permanent successor. The decision has been criticized by investors and market experts as a result of uncertainty and poor planning. Chip Wilson has named three new independent directors to the company’s board, including Mark Maurer (former co-CEO of On Running), Laura Gentile (former chief marketing officer of ESPN) and Eric Hirshberg (former CEO of Activision). Wilson says the current board’s poor strategy has led the company into crisis.
In his statement, Wilson said, “The recent CEO change is the third major failure of the board. Making decisions without a clear succession plan is evidence that the current board is not capable of taking the company in the right direction.” He added that shareholder confidence has been severely shaken and now there is a need for people to join the board who have a better understanding of the product, brand and customers.
Lulu Lemon is currently facing fierce competition, especially with regard to young and affluent consumers. New and fast-growing brands such as Alo Yoga and Vuori have established a strong position in the market, which has negatively affected Lulu Lemon’s sales and share value. The company’s share price has fallen by almost 50 percent this year.
The company has temporarily appointed Chief Financial Officer Meghan Frank and Chief Commercial Officer Andre Maistrini as joint interim CEOs, while the search for permanent leadership continues. According to Morningstar analyst David Swartz: > “The addition of new members to the board is likely to improve the situation, but only one of the three candidates has direct experience in this industry.” He also said that Wilson may not have deliberately sought to join the board himself because of his large investment in Lulu Lemon’s rival Amer Sports. The company has not yet officially responded to the matter, while the Wall Street Journal first reported the development.