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Lululemon Founder Resigns Amid Controversy; New CEO Named

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Lululemon Athletica Inc. announced that company Founder Dennis “Chip” Wilson will relinquish his position as non-executive chairman of the board. He plans to leave the post before the retailer’s annual meeting in June, but will retain his seat on the company’s board.

Laurent Potdevin, most recently president of TOMS shoes, and once a manager at LVMH Moet Hennessy Louis Vuitton SA, will take over the post of CEO from Christine Day beginning in January. Michael Casey, a former Starbucks executive and lead director of Lululemon’s board for the past six years, will becomes chairman.

Wilson and Day leave Lululemon amid considerable controversy. Last Spring, the company was forced to recall its best-selling black “luon” yoga pant style after it was discovered that the stretch fabric used to make it was too sheer. Chief Product Officer Sheree Waterson was terminated because of the snafu.

In June, as shareholder lawsuits accusing the company of hiding the fabric defect began brewing, Day announced she would resign from the company once a replacement was found.

The retailer’s iconic yoga pants continued to attract criticism for inferior quality. Wilson suggested the construction of the pants was acceptable, and that it was  customers’ bodies that were to blame. His comment “Quite frankly some women’s bodies just actually don’t work for it. It’s really about the rubbing through the thighs, how much pressure is there” resulted in a firestorm of criticism from consumers.

Wilson has a reputation for courting controversy and ruffling feathers. In 2011, he took it upon himself to have Lululemon shopping totes emblazoned with the quotation “Who is John Galt?” a reference to the Ayn Rand novel “Atlas Shrugged,” whose theme of Objectivism clashes pretty severely with the teachings of yoga. Then-CEO Day and the board issued a stern remonstration of Wilson, and gave him a set of guidelines for the future the which included “Work through the CEO, not around the CEO.”

Wilson founded Lululemon in 1998 and has helped it grow into a $1.4 billion company. His managerial eccentricities include compelling his executives to take self-help counseling and to complete a 1.2 mile hike near Grouse Mountain in Vancouver, British Columbia. Although he hasn’t been CEO since 2005, he still wields considerable influence as a result of his 27 percent ownership of the company’s shares.

Lululemon shares dropped 1.73% today, to $69.12.

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