March 18 (Reuters) – The appointment of Levi’s veteran Chip Bergh to Lululemon’s board did little to reassure Wall Street investors who are still awaiting a permanent CEO to repair the brand and navigate a proxy battle with founder Chip Wilson. The company, which forecast muted 2026 sales and profit on Tuesday, has appointed Bergh […]
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Lululemon CEO void keeps investors on edge as Levi’s veteran tapped for board
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March 18 (Reuters) – The appointment of Levi’s veteran Chip Bergh to Lululemon’s board did little to reassure Wall Street investors who are still awaiting a permanent CEO to repair the brand and navigate a proxy battle with founder Chip Wilson.
The company, which forecast muted 2026 sales and profit on Tuesday, has appointed Bergh at a time when Wilson has been vocal about an overhaul and raised concerns about certain directors, including lead director David Mussafer.
Bergh, who led the denim maker for more than 12 years, will stand for election at Lululemon’s annual shareholder meeting in lieu of Mussafer, the athleisure company said on Tuesday, adding that a “robust search” for a new CEO was still ongoing after former boss Calvin McDonald stepped down earlier this year.
“Until a credible CEO is in place to reset strategy, organizational design, and accountability (especially in North America) investors are left underwriting hope,” Jefferies analyst Randal Konik said.
Lululemon shares were down about 2% in premarket trading on Wednesday. Shares of the company have lost nearly two-thirds of their value in the past two years as design missteps and a lack of brand freshness led to market share losses and ultimately to CEO McDonald’s exit.
Wilson, who did not immediately respond to a Reuters request for comment, is one of the biggest independent shareholders of Lululemon with a 4.27% stake and had last year nominated three independent directors — Marc Maurer, Laura Gentile and Eric Hirshberg — to the board.
“Bergh … would be a solid candidate for the top spot at Lululemon (if interested). He has strong relevant experience, especially as Levi’s acquired Beyond Yoga, a Lululemon competitor, in 2021,” Morningstar analyst David Swartz said.
Lululemon trades at a forward price-to-earnings ratio of 12.53, while Gap trades at 10.02 and American Eagle at 9.71, according to LSEG data.
Activist investor Elliott Management has also been pressuring the company by putting forth former Ralph Lauren CFO Jane Nielsen as its CEO candidate. Elliott did not respond to a Reuters request for comment.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Devika Syamnath)