Lululemon (LULU) Founder Chip Wilson Takes Shots at Board Ahead of Earnings

Chip Wilson, the founder and a major shareholder Lululemon Athletica LULU +1.18% ▲ , is ratcheting up his attacks on the company’s board of directors hours before the latest earnings release from the Canadian retailer.

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Lululemon is scheduled to release its latest financial results after the stock market closes on March 17. At noon hour, Wilson released a statement, raising concerns about the company’s brand strategy and the oversight provided by the company’s board of directors.

Wilson called out a disconnect between the company’s creative operations and the board’s understanding of brand development. He cited continued discounting to address declining North American sales and described recent product launches as reflecting a “stale and predictable” approach.

Chip Wilson’s War

These are the latest criticisms volleyed by Chip Wilson, who has called publicly for an overhaul of Lululemon’s board of directors following several disastrous product launches by the company over the past year.

referencing comments made by Interim Co-Chief Executive Officer Meghan Frank in a New York Times interview.

The company has reported negative or flat same-store sales for seven consecutive quarters in North America, according to Wilson’s statement. He questioned the board’s decision-making process on product launches and raised concerns about operational issues including product failures with items named “Get Low” and “Breezethrough,” as well as unsuccessful expansions into jeans, cosmetics and running shoes.

Wilson is conducting a proxy campaign to place three independent candidates on Lululemon’s board: Marc Maurer, Laura Gentile and Eric Hirshberg. The group filed an amendment to Schedule 13D with the Securities and Exchange Commission on March 16, showing beneficial ownership of 9,904,856 shares of company stock.

Wilson stated that current leadership lacks the brand and product experience necessary to address fundamental issues. He intends to file a definitive proxy statement with the SEC to solicit shareholder votes for the annual meeting.

The statement was released as Lululemon prepared to announce its quarterly financial results later the same day. Wilson requested that company leadership provide detailed responses regarding discount practices, product development processes, operational changes and North American sales performance.

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