Lululemon’s CEO Choice Is a Missed Chance to Pacify Elliott
Lululemon risks displeasing both of its biggest critics with its CEO choice.
Photographer: Jim Watson/AFP/Getty Images
Lululemon Athletica Inc. has named former Nike Inc. executive Heidi O’Neill as its new chief executive officer, replacing Calvin McDonald who stepped down in December. The surprise appointment risks pleasing no one: Neither two powerful shareholders, nor other investors who sent the stock down to a six-year low on Thursday.
Activist Elliott Investment Management LP, which took a $1 billion stake in the yoga pants maker in December, had been working with former Ralph Lauren Corp. Chief Operating Officer Jane Nielsen as its preferred CEO candidate. Meanwhile, Lululemon founder Chip Wilson, who no longer has a formal role with the company but remains a significant shareholder, had called for the board to be refreshed before the next CEO was chosen.