Athletic apparel company Lululemon is on the search for a new CEO after Laurent Potdevin resigned his post and stepped down from the board of directors, the company said Monday.
While no specifics were given, Lululemon said Potdevin “fell short” of its code of conduct, which calls for employees to “exemplify the highest levels of integrity and respect for one another.”
“While this was a difficult and considered decision, the board thanks Laurent for his work in strengthening the company and positioning it for the future,” said Glenn Murphy, executive chairman of the board. “Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the Board’s most important duties.”
While the company searches for a new CEO, executive chairman Glenn Murphy will step in to lead. Murphy will be backed up by three executives who will take on expanded roles, including Celeste Burgoyne, executive vice president, Americas, who will focus on the global stores and e-commerce businesses; Stuart Haselden, chief operating officer, who will lead operations; and Sun Choe, senior vice president of merchandising, who will focus on product development, design and merchandising.
This is not the first time Lululemon has had to replace a CEO who was steeped in controversy. In fact, Potdevin assumed the role after then CEO Christine Day was forced out over product issues that prompted shareholder lawsuits and founder Dennis “Chip” Willson stepped down from the board after making disparaging remarks about some Lululemon customers.
Potdevin will receive $5 million in severance and must abide by a two-year non-compete.
Having helped pioneer the athleisure category, Lululemon has seen strong performance lately. Comp store sales were up 8 percent in the third quarter, ended Oct. 29. The increase came on a 26 percent spike in direct to consumer sales. Net revenue for the quarter reached $619 million, a 14 percent increase over the prior year period.
Based on a robust holiday, the company increased its guidance for the fourth quarter. It now expects net revenue will be in the $905 million to $915 million range, up from $870 million to $885 million, based on comp sales in the high single digits.
Diluted earnings per share is anticipated to fall between $1.24 to $1.26, an increase from the initial outlook of $1.18 to $1.21.