Lululemon’s shares dive after naming Heidi O’Neill – Business News
Lululemon Athletica’s shares are swooning after the leggings maker this week named a new chief govt who buyers say doesn’t have the chops to resolve the struggling company’s issues.
Lululemon’s shares have been down by as a lot as 12% late Thursday morning after it named Nike veteran Heidi O’Neill as new CEO beginning Sept. 8.
“We are disappointed with the announcement and investors are, too, as the shares are down,” BNP Paribas analyst Laurent Vasilescu wrote in a analysis observe. “Lululemon needs a turnaround CEO and not a growth CEO.”
Heidi O’Neill will turn into the following CEO of Lululemon in September. Hardy Wilson for Lululemon
Lululemon has been beneath stress for more than a 12 months, with two proxy fights raging because the company’s weak financial efficiency has turn into a flash level.
Its founder and former chief govt, Chip Wilson, has been vocal concerning the board’s duty within the company’s woes.
He has argued that the company’s management must be overhauled whereas Elliott Investment Management took a $1 billion stake within the company final 12 months and pushed for former Ralph Lauren govt Jane Nielsen to turn into CEO.
Nielsen “would have been the right pick,” Vasilescu wrote.
O’Neill succeeds Calvin McDonald, who stepped down in January – after a seven-year run – amid declining gross sales in 2025 and new product misses.
Known for its expensive yoga attire and athleisure put on, Lululemon launched a quantity of new merchandise that flopped – together with brightly coloured attire and puffer jackets – forcing aggressive discounting.
Lululemon has misplaced market share to newer rivals over the previous 12 months. Veronique – stock.adobe.com
It misplaced market share to newer rivals, together with Vuori and Alo Yoga, as The Post beforehand reported.
In its most up-to-date quarter, Lululemon’s gross sales in North America declined by 4% in comparison with a 12 months in the past, whereas total gross sales grew by 1% to $3.6 billion.
Still, O’Neill depicted the company’s prospects as promising.
“Lululemon is an iconic brand with something rare: genuine guest love, a product ethos rooted in innovation, and a global platform still in the early stages of its potential,” O’Neill mentioned in a assertion. “As I step into the CEO role in September, my job will be to build on that foundation – to accelerate product breakthroughs, deepen the brand’s cultural relevance.”
Former CEO, Calvin McDonald (left), stepped down in January. Max Cisotti/Dave Benett/Getty Images for lululemon
She spent more than twenty years at Nike, rising to president of shopper, product and model earlier than leaving the company in September.
O’Neill is an “obvious choice” for the function, GlobalData Managing Director Neil Saunders wrote on LinkedIn.
“There will be some, mostly activist investors,” O’Neill added, “who see O’Neill as something of a safe and traditional choice. This argument is partly valid as a lot of cultural change is needed at Lululemon in order to improve performance.”
A spokesperson for Wilson declined to touch upon O’Neill. Elliott Management didn’t instantly reply to a request for remark.
