Lululemon names former Nike exec Heidi O’Neill as new CEO

Lululemon on Wednesday named Heidi O’Neill as the athleisure firm’s new CEO, efficient Sept. 8.

The information comes after the corporate has seen greater than a 12 months of disappointing efficiency and been embroiled in a dramatic proxy battle, with founder Chip Wilson criticizing the enterprise.

Shares of the corporate sank greater than 5% in prolonged buying and selling.

O’Neill has held a number of roles at Nike, contributing to the sportswear behemoth’s progress. She additionally held positions at Levi Strauss, Hyatt Hotels and Spotify.

“Heidi is an inspiring leader and proven, consumer-driven brand strategist, with a rare ability to both imagine a new future for a brand and to create the structure and processes to deliver on that vision,” stated Marti Morfitt, the corporate’s government chair of the board of administrators, in an announcement. “We selected Heidi because of the breadth of her experience, her demonstrated success delivering breakthrough ideas and initiatives at scale, and her ability to be a knowledgeable change and growth agent.”

O’Neill stated in an announcement that she plans to give attention to constructing off the corporate’s core basis and unlocking progress in international markets. O’Neill will begin with a base wage of $1.4 million, in keeping with an 8-Okay submitting.

“I am humbled by the opportunity and energized by what the team is already building,” she stated in her assertion. “I look forward to joining the company and helping to define and deliver the organization’s next chapter of success.”

Lululemon has been combating weak gross sales and elevated competitors, as effectively as mounting prices from tariffs. In its latest earnings reportthe retailer stated it expects tariffs to value the corporate $380 million this 12 months.

Wilson, Lululemon’s largest shareholder, has additionally been inserting elevated public strain on the corporate to make modifications to its board of administrators. He didn’t instantly reply to a request to touch upon the appointment.

In an announcement, GlobalData managing director Neil Saunders stated O’Neill has “a very strong pedigree in the activewear and sporting space” and “has an intimate knowledge of how the industry works.”

“There will be some, mostly activist investors, who see O’Neill as something of a safe and traditional choice,” Saunders stated. “This argument is partly valid as a lot of cultural change is needed at Lululemon in order to improve performance. However, in our view, O’Neill is her own person who will come with an agenda of change.”

While at Nike, O’Neill performed a key position within the firm’s doomed direct-to-consumer gross sales technique, the place the model pivoted away from wholesale companions in favor of its personal web site and shops beneath former CEO John Donahoe. When present CEO Elliott Hill took over as Nike’s subsequent chief government, he made it a precedence to stroll again the direct promoting plan.

Prior to leaving Nike, O’Neill additionally oversaw product and innovation at a time when the model confronted criticism for falling behind on new merchandise and focusing too closely on the identical legacy life-style franchises, Dunks, Air Force Ones and Air Jordans. While the franchises briefly led to a surge in gross sales, fueling Nike’s progress to a $50 billion plus model, they finally turned ubiquitous out there and seen as uncool by some shoppers.

Now, Hill continues to be engaged on unwinding that technique and clearing stock from these franchises from {the marketplace}, which has hit Nike’s margins and led to a decline in on-line gross sales.