Lululemon’s business woes have been cast into the spotlight recently. The athletic apparel retailer has been losing market share and its “cool” factor among customers. The company is taking steps to revitalize the brand and address its recent underperformance.

The activist hedge fund Elliott Management has built a $1 billion stake in Lululemon. This represents a sizable ownership stake in Lululemon, which has a market capitalization of around $20 billion. Elliott Management has suggested a number of changes to the company, including proposing a new CEO candidate to replace the current CEO. Jane Neilsen, the former chief financial officer and chief operating officer of Ralph Lauren, has been in discussions with Elliott Management about the potential CEO opportunity.

Chip Wilson, the founder of Lululemon, has openly expressed his discontent with the company’s current leadership and strategic direction. Lululemon Athletica Inc. was founded by Chip Wilson in 1998 in Vancouver, Canada. It is a designer, distributor, and retailer of athletic apparel. The company’s initial products were designed for women to wear to yoga. Mr. Wilson stepped down as CEO in 2005 after selling 48% of the company to the private equity firm Advent International.

Today, Lululemon operates in over 25 countries and has approximately 39,000 employees worldwide. Its products include pants, tops, jackets, footwear, and accessories for fitnessactivities.

Lululemon has been losing market share in the athletic apparel industry as competitors have steadily been gaining market share. In particular, customers have switched to brands such as Alo Yoga and Vuori.

Brand image and product quality are integral to the success of companies in the athletic apparel industry. A number of recent mishaps have tainted Lululemon’s reputation and eroded confidence in the company’s management team. Recently, incidents of poor quality control in its products have plagued the retailer. For example, the company had to pull a line of leggings that many customers complained were see-through when bending or squatting.

In December 2025, Lululemon’s founder Chip Wilson launched a proxy fight with the goal of reforming the company’s board of directors. As detailed in the proxy materials filed with the Securities and Exchange Commission (SEC), Mr. Wilson has nominated three director candidates to the board. The three director nominees are former ESPN Chief Marketing Officer Laura Gentile, former Activision CEO Eric Hirshberg, and former co-CEO of sneaker brand On Running Marc Maurer.  The directors will stand for election at Lululemon’s 2026 annual meetingof stockholders.

A proxy fight is a contest for corporate control or influence over a company’s decision. The purpose is often to force management or strategic changes. In order to launch a proxy fight, the dissident shareholder group will file proxy materials with the SEC to submit director nominees for election at the company’s upcoming annual meeting of shareholders. The dissident group is required to file a proxy statement with the SEC. Copies of any written solicitation materials that are published prior to filing the definitive proxy statement must be filed with the SEC on the date of first use pursuant to Rule 14a-12 of the proxy rules.

In some cases, the company will reach a settlement with the dissident shareholder group prior to the matter being submitted to a vote at the shareholder meeting. Thus, some proxy fights only last for a few weeks while others may drag on for many months.