Even if you don’t know

Chip Wilson

, you probably know his ubiquitous black leggings. The

Lululemon
Athletica Inc. founder built the Vancouver-based retailer into one of the world’s most influential brands, before arguably becoming its biggest critic. Here, the Financial Post looks at why Wilson thinks Lululemon has fallen behind and his very public push to reshape the board of directors.

Who is Chip Wilson?

Wilson started the company in Vancouver in 1998 as a

yoga-focused athletic apparel brand

(he reportedly doesn’t like the term “athleisure”) and it has since grown into a publicly traded global juggernaut with an US$18.1 billion market capitalization as of April 2.

He served as

chief executive

until 2005, and Lululemon’s polished designs and aspirational marketing cemented it as a 2000s status symbol. It also made Wilson very rich. He is worth as estimated US$5.7 billion, according to

Forbes’ billionaires list

, and has invested in

other apparel brands

, real estate and private equity.

Lululemon’s rise wasn’t without controversy, however, sometimes due to its founder’s outspokenness. When Lululemon recalled some of its black yoga pants in 2013 after customers complained about its fabric being too sheer, Wilson told a Bloomberg reporter that “some women’s bodies just actually don’t work” in the brand’s clothing. Backlash ensued.

Wilson stepped down as Lululemon’s chairman shortly afterwards and left the board two years later. He still has a lot to say about the company’s direction and performance, however, as its largest non-institutional shareholder.

Why is Wilson criticizing Lululemon?

Over the last decade, Wilson has taken to calling out its leadership, strategic direction and what he describes as a departure from its original focus on “innovation, product, culture and customer experience.”

Back in 2016, Wilson warned that Lululemon had “lost its way” and was relinquishing market share to the likes of Nike Inc. and Under Armour Inc.
Then came the COVID-19 pandemic — a boon for purveyors of comfortable clothing as online sales surged.

But the retailer has struggled in recent years. Sales have slowed in its main U.S. market amid competition from brands like Alo Yoga, Vuori and Athleta, and Lululemon has pulled two product lines in two years over customer complaints about design and quality.

And like many other major clothing brands that rely on a complex global supply chain to source, manufacture and distribute their wares, Lululemon has faced pressure from United States tariffs and the end of the duty-free shipping loophole known as the de minimis exemption.

Those struggles are reflected in Lululemon’s share price, which peaked at a closing high of US$511.29 on Dec. 29, 2023, and is now trading around

US$156 (as of April 2).

 Shares have declined around 

44 per cent over the last year.

In October 2025, Wilson ramped up his criticisms with a full-page ad in the Wall Street Journal saying Lululemon’s directors have “systematically dismantled the business model” and rejected the idea of hiring a product-driven CEO in favour of one who “speaks Wall Street.”

What does Wilson want?

In December, Lululemon announced that Calvin McDonald, its chief executive of seven years, would step down on Jan. 31. Wilson quickly

launched a proxy contest

to “refresh” the board of directors before the company hired a new CEO.

His PR campaign includes a website and press releases, through which he has stated that Lululemon is “special, but in need of change” and needs “visionary creative leadership to thrive.” A representative for Wilson declined to comment.

Wilson has nominated three independent candidates to stand for election at Lululemon’s annual general meeting in June: Marc Maurer, former co-chief executive of Swiss sportswear company On Holding AG; Laura Gentile, former chief marketing officer of sports network ESPN; and Eric Hirshberg, former chief executive of video game publisher

Activision Publishing, Inc.

Wilson also wants the board to shift to a declassified structure, where directors stand for election every year instead of serving multi-year terms.

Wilson’s push comes during a period when

shareholder activism

is at an all-time high, with with 255 campaigns around the world last year, according to

Barclays’ 2025 review of shareholder activism

. The U.S. led the way with 141 of them.

Activist investors attempt to bring “private equity ethos into the public markets” and believe certain levers can be pulled to unlock value from underperforming companies, said Jim Rossman, global head of shareholder advisory at Barclays.
 

“The root of activism is that there’s a perspective by a shareholder that there’s alpha to be gained, but the company is going to need to change course,” Rossman said.
 

How has Lululemon responded?

The company declined to comment to the Financial Post on Wilson’s proxy contest and instead referred to its prior statements.

After Wilson debuted his three nominees in December, Lululemon said in a release that it has “engaged extensively and in good faith for many years with Mr. Wilson to understand his perspectives and communicate our strategy” and would review and consider his nominations.

In the meantime, the company’s board is running “a robust search process” for the next CEO and has met with “highly qualified” candidates, co-interim chief executive and chief financial officer Meghan Frank said in a March 17 earnings call.

Frank told analysts that improving full-price sales growth in North America is a “top priority” for the company in the coming year. “We’ve been course correcting where needed to restore and protect our brand health over time,” she said.

While Frank said momentum is strong in Lululemon’s international business, the company expects both North American and U.S. revenue to fall one to three per cent this year. It forecasts full-year revenue to grow between two per cent and four per cent (in the range of US$11.35 billion to US$11.5 billion) in 2026.

As Lululemon’s AGM approaches, talks between the two sides continue. Wilson’s nominees met with members of the board at the end of March after the release of its earnings report, according to a summary of events in securities filings from Wilson’s side.

Will the founder get his way?

Wilson isn’t the only activist investor pushing for change at Lululemon. According to media reports, Florida-based Elliott Investment Management L.P. has a billion-dollar stake in the company and is advocating for former Ralph Lauren Corp. and Coach executive Jane Nielsen to become CEO. 
 

Elliott was the most “active activist” firm in the U.S. last year and spent around US$19 billion on its campaigns or an average of US$1.1 billion each, according to Barclays’ shareholder activism report.
 

“If Elliott is involved with your company, that’s a lot of pressure and leverage that you don’t find with other activists,” said Rossman.
 

Proxy fights are a distraction for companies and expensive for both activists and targets, who need to hire lawyers, PR firms, proxy solicitors and bankers. In its most recent quarterly earnings report, Lululemon said it had spent about US$5 million in 2025 on expenses related to the proxy contest and expects to incur more one-time costs this year.
 

For this reason, Rossman said many companies strike a settlement or a cooperation agreement before the shareholder vote. There were a record 52 settlements between activist shareholders and U.S. companies last year, according to Barclays’ report.

Rossman said boards must make a risk-reward assessment around whether to settle or endure the costs, negative publicity and distractions associated with proxy campaigns.

Settlements can take different forms but usually involve adding new directors to the board and negotiating who gets to appoint them. Rossman said companies may also want activists to sign a non-disparagement agreement.

“There’s a lot of variation in these agreements, and that’s kind of the art of the compromise,” Rossman said. “If both parties feel comfortable settling, then the settlement agreement can go down lots of paths.”

• Email: jswitzer@postmedia.com

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