Lululemon Founder Considers Retaking Board Seat as Feud Simmers
(Bloomberg) -- If you want to score a meeting with Chip Wilson, you better be prepared to sweat.
The founder of Lululemon Athletica Inc. likes to start his days hiking a 2.9 kilometer (1.8 mile) trail up the face of Vancouver’s Grouse Mountain. It’s his preferred way to conduct meetings and he’s sometimes accompanied by as many as 20 people seeking advice, funding or just a workout.
Now he’s considering bringing his unique sensibilities back to the Lululemon boardroom, which he left in 2015 after repeatedly clashing with the company’s leadership and criticizing its shift from the scrappy, entrepreneurial roots he laid down.
“My goal is to be back on a public board in 2019,” Wilson, 63, said in New York last week while promoting his book, “Little Black Stretchy Pants,” which details the rise and -- in his telling -- fall of Lululemon. He says the yogawear maker is his first choice for a board seat, though he’s still exploring alternative ways to share his expertise, including advising other technical apparel companies.
Even though Wilson said he’s optimistic about the firm’s new chief executive officer, Calvin McDonald, any return to the company he founded in 1998 could prove awkward. He’s spent years railing at Lululemon and his book bemoans its “five years of missed opportunity" since 2013, arguing it failed to take advantage of its leadership position and lost ground to rivals like Under Armour Inc. and Nike Inc.
Lululemon declined to comment on Wilson’s plans.
Wilson’s dissatisfaction with the company might surprise those who’ve tracked its share price, which has more than doubled in the past year. That’s made Wilson one of Canada’s richest people, with a $3.6 billion fortune, including a $2.4 billion stake in Lululemon.
“Any other entrepreneur would love to create what Chip Wilson created," said David Ian Gray, principal of Canadian retail consulting firm DIG360. “The margins were off the charts and they still are. The profitability of the brand is incredible."
But in Wilson’s eyes, the company’s safety-first approach resulted in a half-decade of stagnation and its recent growth should have been built on a greater base. His 13 percent stake gives him the right to nominate one director, according to the company’s 2018 proxy. And the term of his current nominee, Kathryn Henry, expires next year.
Wall Street is leery of any return, with memories still fresh of the disruption Wilson inflicted on Lululemon when he was chairman, including clashing with then-CEO Christine Day and a November 2013 interview with Bloomberg News, in which he said Lululemon’s pants “don’t work for some women’s bodies."
Wilson apologized, stepped down as chairman a month later, then threatened a boardroom fight and sold half his stake in 2014 before resigning in 2015.
“He’s proven to be a highly volatile board member and created a level of disruption that I haven’t seen at retail companies of similar size," said Matthew McClintock, a Barclays Plc analyst who credits current management for turning around the firm and has a price target of $200 on Lululemon’s stock. “Chip is great as an entrepreneur. You need a completely different skill set to run Lululemon at the size it is now.”
Wilson shrugs off the criticism, arguing such a mind-set misses future opportunities. “Metric-driven people are nervous of creative people,” he said. “Creative people can’t prove the future, but metric people can prove the past."
He says he was devastated by the fallout of the 2013 interview and took three years to recover. But he’s returning to public life on the offensive.
His reluctance to step away entirely from Lululemon is characteristic of many entrepreneurs. “Here’s a guy who has got more money than he’ll ever be able to spend, but his real identity is still fused with this apparel company that he started," said Mark Lipton, an author and professor of management at the New School.
Even if he doesn’t return to Lululemon, he’s got plenty to keep him busy. His holding company, Hold It All Inc., manages his family’s investments, real estate and has a private equity unit as well as a philanthropic arm.
As Wilson’s morning mountain routine suggests, he’s a fervent adherent of the West Coast lifestyle and owns Vancouver’s most valuable home, a waterfront mansion valued at $60 million. A former swimmer, his competitive instinct still burns even as he speaks of the value of mediation and mindfulness.
“For all his West Coast vibe, you don’t succeed in retail by being a surfer dude," consultant Gray said. “He’s savvy and a strong business guy."
Wilson embraces the contradictions as he sips a cappuccino in a hotel in New York’s SoHo neighborhood.
“I’m Greenpeace on the left and Attila the Hun on the right.”
©2018 Bloomberg L.P.