Lululemon Swings on CEO Shakeup
Shares of Lululemon Athletica Inc (NASDAQ:LULU) traded wildly to the upside on Tuesday morning following a big announcement in the morning. After months of headlines stemming from the Chief Executive officer, the company named Laurent Potdevin as its chief executive and said founder Chip Wilson will step down as non-executive chairman. Potdevin will start in January 2014 from Day and will hopefully continue the companies. Potdevin joins from TOMS Shoes and has earlier worked with Burton Snowboards and LVMH. Potdevin brings a lot to the table for the company with her deep background in retail. Some traders think she could take the brand to an entirely new table. However, we may see short term problems stem for the transition.
Lululemon was hit with a U.S. lawsuit in July, accusing it of defrauding shareholders by hiding defects in yoga pants whose sheerness led to a recall, and concealing talks that led to the sudden departure of its chief executive. Lululemon, also faces new customer complaints that some products were too susceptible to pilling, small balls of fibers that form on fabric from wear and tear.
Wilson, who founded the company in 1998 and owns 8.84 percent shares knows controversy all too well. Over the last couple years, Wilson has made alarming remarks that have been considered by many to be insensitive and uncalled for. In the coming weeks we should get more clarity into the situation. Shares of the company are trading all over the place. At the time of this writing, shares of Lululemon were unchanged at $70.30 per share. At the start of the session, shares of the company traded the $71.80 before pulling back down to $69.30.
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