lululemon Settles Proxy Battle With Founder Chip Wilson

lululemon is ending its feud with founder Chip Wilson. The athletic apparel company entered into an agreement with Wilson on Wednesday that ended a messy proxy contest the founder started late last year as its largest individual shareholder. Under terms of the deal, luluelmon has agreed to appoint two of Wilson’s nominees — former On co-CEO Marc Maurer and former ESPN Chief Marketing Officer Laura Gentile — and an additional director with “product and brand expertise in apparel” by October. In exchange, Wilson agreed not to bad-mouth the company for about a year-and-a-half, among other provisions.

Total Retail's Take: Wilson has been outspoken in his criticism of lululemon, chiding the brand for its lack of product innovation, technical apparel leadership, and brand distinctiveness. He has repeatedly argued that lululemon lost its “product-first vision,” and the board appointments seem to agree with him. In addition to On's Maurer, who was at the helm of a brand lauded for its performance/apparel product innovation, the promised third director specifically needs “product and brand expertise in apparel.”

In its effort to keep pace with newer premium lifestyle brands such as Vuori and Alo, which are winning on cultural relevance and product freshness, lululemon must return to its roots and rely on premium, differentiated product. However, product is not the only focus area for Wilson and other members of lululemon's leadership team. The brand will need to restore the cultural momentum that it generated in its early days when it was growing sales quickly, creating brand loyalists, and the leader in the athleisure market.