Don't Cry for Lululemon: Why Founder's Exit is a Win for Investors

lululemon athletica is finally free of its controversial founder and former CEO, Chip Wilson. Though the stock slid lower yesterday after Wilson announced his departure from Lululemon's board of directors, the move is key for the company and its shareholders. For starters, Wilson was something of a live wire, particularly when it came to speaking with the press. Few can forget his offensive comments over Lululemon's sheer pants snafu, in which Wilson argued that some women's bodies simply don't work in the company's tight-fitting yoga pants .

Here's a look at Wilson's turbulent reign and why his final goodbye is a win for shareholders.

A long and troubled breakup

The yoga-apparel retailer has been trying to cut ties with its opinionated founder for some time now. In 2011, he butted heads with Lululemon's board and then-CEO Christine Day over certain creative decisions, including placing quotes from Atlas Shrugged on shopping bags. This came back to bite him when the company was forced to pull the bags due to customer complaints about the brand's newfound messaging.

Wilson then stepped down as chairman in 2013, following the company's late 2012 recall of more than 17% of its signature luon pants for being too sheer, along with his subsequent remarks about women's bodies. However, that wasn't the end of Wilson's on-again, off-again relationship with Lululemon.

Source: lululemon athletica.

Wilson shook things up again last June when he started a very public battle with Lululemon's board. At the time, he used his then-28% stake in the company to vote against two of its board members. There were rumors Wilson wanted to take Lulu private. However, by August he had reversed course and instead sold half of his stake in the company to a private equity firm.

Fast-forward to today and it seems Wilson has officially washed his hands of the company he founded in 1998.

A future without Chip

Ultimately, Wilson's exit should enable Lululemon to better focus on rebuilding its brand and combating competition in the space. While Wilson was both innovative and visionary in Lulu's early days, there is no denying his involvement in recent years had become a major distraction for Lululemon and its board. At the very least this will mean less controversy for the yoga-apparel maker. Moreover, it marks a new chapter for Lululemon and its shareholders, and perhaps the official start of a long-overdue recovery.

1 great stock to buy for 2015 and beyond

2015 is shaping up to be another great year for stocks. But if you want to make sure that 2015 is your best investing year ever, you need to know where to start. That's why The Motley Fool's chief investment officer just published a brand-new research report that reveals his top stock for the year ahead. To get the full story on this year's stock -- completely free -- simply click here .

The article Don't Cry for Lululemon: Why Founder's Exit is a Win for Investors originally appeared on

Tamara Rutter owns shares of Lululemon Athletica. The Motley Fool recommends Lululemon Athletica. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More