Lululemon’s shares spike on CEO’s resignation; founder warns of potential proxy battle

Lululemon Athletica saw a surge in its stock price following the announcement of CEO Calvin McDonald’s resignation due to declining US sales. McDonald, who has been at the helm for seven years, will step down on Jan. 31 and remain as an advisor until March. The company’s founder, Chip Wilson, has put the board on notice about a potential proxy battle.

Shares of the Vancouver-based athleisure company rose by 10% to $208 in Friday afternoon trading after the news. However, Wilson is calling for new directors in addition to McDonald’s resignation, citing the board’s failure to hold management accountable for product innovation.

Lululemon’s sales in North America have been on the decline, with the company admitting that its merchandising mix does not align with its brand vision. The company’s CFO, Meghan Frank, will serve as interim co-CEO during the transition.

Analysts have criticized McDonald for leading Lululemon astray with inconsistent designs and expansion into non-core categories. Wilson, who was previously ousted from the company, is pushing for new independent directors to oversee the CEO search.

The controversy surrounding Lululemon’s leadership comes as Wilson prepares for a potential proxy fight and meets with potential investors. Wilson, one of the company’s largest shareholders, has been vocal about the board’s failure to plan for the future and manage an effective succession process.

The Post has reached out to Lululemon for comment on the situation.