Exclusive-Lululemon appoints new director as proxy fight with founder looms, sources say

By Svea Herbst-Bayliss

NEW YORK, April 28 (Reuters) – Lululemon Athletica is appointing an executive with significant branding and marketing experience to its board as the athletic apparel maker’s founder presses management to revive its brand, sources told Reuters.

Esi Eggleston Bracey, who was chief growth and marketing officer at Unilever until earlier this year and previously held senior positions at Procter & Gamble, will become a director immediately, the sources said.

At Unilever, which makes Dove personal care products, she led the global transformation of marketing across a portfolio of more than 400 brands. She also worked at cosmetics maker Coty where she helped reposition its CoverGirl brand.

Since 2021, Eggleston Bracey has been a director at houseware and kitchen supply company Williams-Sonoma and serves on its audit and finance committee.

She will stand for election at Lululemon’s annual meeting, which has been scheduled for June 25. Director Shane Grant, who is chief operating officer, Americas at Colgate-Palmolive, said he will not stand for re-election, the sources said.

Lululemon’s decision to add a second new director in as many months comes days after it named a new chief executive officer and continues to tangle with its founder, Chip Wilson, who has said the company has lost its “cool” factor.

Heidi O’Neill will start as chief executive officer in September after her non-compete agreement with Nike ends. In March Lululemon added former Levi Strauss & Co CEO Chip Bergh as a director.

Wilson, who founded Lululemon in 1998 and left the board in 2015, wants investors to elect three directors he selected and has said a new CEO should have been picked only after a broader board refreshment.

A representative for Lululemon declined to comment.

Lululemon’s decision to add Eggleston Bracey signals the board and management are taking steps to revive a brand that popularized the term athleisure when people wore its signature yoga pants to the gym and, during COVID, to the home office and almost everywhere else.

Lululemon went public in 2007 and its stock hit a high at $511 in late 2023. It closed at $146.94 on Monday, after a 45% drop over the last year, which leaves it with a market valuation of $17 billion as it faces increased competition from newer rivals like Alo Yoga and Vuori in the United States.

But some investors have also praised strong international sales numbers and innovative products like stretchier pants, noting the signs of improvement are becoming visible.

Still the proxy fight with Wilson, who owns roughly 4.3% of the company, looms large after documents seen by Reuters show there have been discussions between the two sides but no settlement agreement has been reached.

(Reporting by Svea Herbst-Bayliss; Editing by Chris Reese)