The $25 billion apparel giant is embroiled in a power struggle.

Author | Xiaoxia Li

Editor | Qian Qiao

A power struggle surrounding the sportswear brand lululemon has suddenly escalated.

On December 29 local time, Chip Wilson, the founder of lululemon, officially dropped a bombshell "power - grabbing" move. He nominated three heavy - weight independent director candidates to challenge the 2026 shareholders' annual meeting election, directly targeting the strategic decision - making ability of the current board of directors.

This surprise move came only 18 days after lululemon announced that CEO Calvin McDonald would step down on January 31, 2026, pushing this sportswear giant with a market value of over $25 billion into the center of the public opinion storm.

As the largest independent shareholder holding about 9% of lululemon's shares, Wilson's challenge is not accidental.

This key figure of lululemon completely withdrew from the board of directors in 2015, but his attention has never left the brand he founded.

Since 2024, he has publicly criticized the management multiple times for "over - catering to the public taste" and "stagnant innovation." He even published a full - page open letter in The Wall Street Journal, blasting the board for prioritizing short - term performance and cultural erosion.

Now, Wilson's protest has escalated from verbal criticism to actual action.

What further complicates the situation is that the activist investment fund Elliott Investment Management, known as the "Wall Street hunter," has quietly entered the scene. It holds shares worth over $1 billion and is deeply involved in the company's governance, upgrading this power game from a binary confrontation to a three - way tug - of - war.

All of this is happening while lululemon is deeply trapped in a dilemma of pressured performance, a halved stock price within the year, and stalled growth in its core markets.

 A Pre - announced Power Struggle

This power struggle is not a spur - of - the - moment idea.

Going back to December 11 last year, lululemon suddenly announced that Calvin McDonald would step down on January 31, 2026, without naming a successor.

Once the news was out, the capital market reacted subtly, with the stock price rising nearly 10% against the trend. Behind this abnormal fluctuation was investors' disappointment with the existing strategy and their expectation for a leadership change.

McDonald has led lululemon for seven years and is the CEO with the longest tenure after the founder. During his tenure, he led lululemon to achieve a leap - forward growth in revenue from $3.3 billion to $10.6 billion, expanded the number of stores from more than 400 to 796, and extended the business to over 30 countries and regions.

The take - off of lululemon's Chinese market also occurred during McDonald's tenure.

When he took office in August 2018, lululemon had only been in the Chinese mainland market for four years, and the total number of all its stores in China (including Hong Kong and Taiwan) was 16 (as of July 29, 2018). By the third quarter of fiscal year 2025, the number of stores in the Chinese mainland had expanded to 165, covering 45 cities, and even reaching second - and third - tier cities such as Hohhot and Xuzhou. Since the third quarter of 2024, it has opened 27 new self - operated stores in the Chinese mainland.

In terms of revenue, the Chinese mainland has grown into the second - largest market after the United States.

(Source: lululemon's Q3 fiscal year 2025 earnings report)

The earnings report shows that in the third quarter of fiscal year 2025, lululemon's net revenue in the Chinese mainland soared by 46% year - on - year to $465 million, while the net income in the largest market, the United States, was $1.38 billion.

All of this is inseparable from McDonald's aggressive expansion strategy.

He promoted the brand to break out of the single yoga category and enter multiple sports scenarios such as running, tennis, and cycling. At the same time, he vigorously developed new categories such as men's clothing, footwear, and accessories.

This strategy was very effective in the early stage: the men's clothing business achieved the goal of doubling sales ahead of schedule, and its growth rate surpassed that of women's clothing for the first time in the fourth quarter of 2023; the proportion of international market revenue increased from less than 20% to nearly 40%.

Expansion also comes at a cost. In Wilson's view, large - scale expansion made the brand lose its original intention and fall into the "dilemma of losing the sense of fashion." The management's excessive pursuit of revenue growth led to the neglect of the innovation and iteration of core products, resulting in the brand becoming increasingly mediocre.

The Q3 fiscal year 2025 earnings report shows that the company's net profit declined by 12.8% year - on - year, the net revenue in the core American market decreased by 2% year - on - year, and comparable sales even dropped by 5%.

As the former growth engine, the negative growth in the North American market frustrated investors' confidence. Coupled with problems such as weak product innovation and high inventory, lululemon's stock price fell by more than 52% at its maximum in 2025, and its market value evaporated by over $20 billion.

 The Dispute between Scale and Original Intention

The conflict between Wilson and the current management is ostensibly a power struggle, but at its core, it is a fundamental divergence in the brand's development path: should it adhere to the founder's focused strategy of serving "Super Girls" or continue the current CEO's all - category expansion route?

In 1998, 43 - year - old Wilson officially founded lululemon in a small design studio in Vancouver, Canada.

To create the ideal yoga pants, Wilson spent months refining the fabric and invested $80,000 in two Japanese flat - lock sewing machines to optimize the cutting. The first product he launched was priced three times higher than similar brands but quickly opened up the market with its ultimate wearing experience.

More importantly, he accurately targeted "Super Girls," young women who are "wealthy, love health, and are willing to pay for high - quality sportswear." Through the endorsement of yoga instructors and community activity operations, he made lululemon more than just a clothing brand but a symbol of a lifestyle.

Wilson's departure began with a combination of a product crisis and controversial remarks. In March 2013, lululemon's core product, black yoga pants, had a "sheer" problem due to the thin fabric and was forced to be recalled on a large scale. This product accounted for 17% of the sales at that time.

In the face of the crisis, Wilson's response not only failed to calm the public opinion but also pushed himself into the abyss. In an interview with Bloomberg, he said bluntly: "Frankly, some women's bodies just don't suit our yoga pants... It has more to do with the friction between the thighs and the frequency of wearing."

These remarks instantly detonated public opinion, causing lululemon's brand image to plummet. The board of directors took the opportunity to pressure Wilson, and he was forced to step down as the chairman in December of that year, only retaining his directorship. Two years later, he officially resigned from his directorship and completely bid farewell to the company he founded.

Publicly, he claimed that "he had achieved his return goal and it was time to leave," but privately, this "being kicked out" experience became a knot in his heart. In the following decade, he never stopped criticizing the management and even published an autobiography detailing his game with the board of directors.

Ten years later, Wilson has drawn his sword again.

It is reported that the three candidates nominated by Wilson are Marc Maurer, the former co - CEO of On Running, Laura Gentile, the former marketing director of ESPN, and Eric Hirshberg, the former CEO of Activision, covering key fields such as brand operation, marketing communication, and cross - border management.

Wilson's core demand is to safeguard the brand's "original intention gene." He always believes that lululemon's core competitiveness lies in "differentiation" rather than "popularization." "Trying to please everyone will only lead to the loss of core users."

He also sharply pointed out that the management has lowered the fabric standards, making the once high - end products gradually become like GAP. The classic Align yoga pants and Scuba sweatshirts have lacked substantial innovation for years and only rely on color changes to maintain sales.

Even though the Chinese market has performed well, Wilson is more concerned about the recovery of the core North American market. He believes that the stalled growth in the domestic market is lululemon's fundamental crisis and is worried that the sinking expansion in the Chinese market will further dilute the high - end positioning.

Who can lead lululemon out of the maze depends on the dual results of the CEO selection and the board of directors' election.

But no matter who takes the helm in the end, they cannot avoid the fact that lululemon can never return to its early days when Wilson founded it.

The once niche community brand is now a clothing giant with a market value of $25 billion.

Market expectations and the competitive environment have completely changed.