Lululemon's board issued a direct public rebuke of company founder Chip Wilson on Monday, escalating a proxy battle that will come to a head at the athleisure brand's annual shareholder meeting next month.
"Mr. Wilson has outdated perspectives about how to position Lululemon and the future of the company, as well as troubling conflicts of interest," the board stated in a letter issued Monday.
The letter went further, warning shareholders against supporting Wilson's slate of candidates. "Electing any of Mr. Wilson's nominees would endorse his misguided perspectives, significantly downgrade the Board's skills and expertise, and jeopardize the ability of the leadership team and our incoming CEO," the letter read.
At the center of the dispute is Heidi O'Neill, a former Nike executive who was hired to lead Lululemon through its next phase of growth. Wilson has questioned whether the company is making the right leadership choices. The board has argued O'Neill brings the experience needed to strengthen the brand globally. Shares sank in April after the company announced O'Neill as its next CEO, according to Yahoo Finance.
Wilson, who remains one of the company's largest shareholders, is backing a group of board nominees as he pushes for major changes inside the company. He has openly criticized Lululemon's recent leadership decisions, product strategy, and overall brand positioning.
The company has struggled to reverse course against changing consumer fashion tastes and stiff competition. The stock is down more than 40% year to date.
Shareholders are expected to vote on the competing board nominees at the annual meeting on June 25.
