It’s easy to look past a new board addition for ailing Lululemon (LULU).
But the news warrants another look.
Lululemon said late Tuesday it’s adding former Levi’s (LEVI) CEO Chip Bergh to its board. Bergh — the current chair of computing giant HP (HPQ) and creator of the Swiffer mop while an exec at Procter & Gamble (PG) — will succeed David Mussafer in the position.
Bergh, known for wearing his Levi’s jeans in the shower to give them a wash, is a big win for Lululemon.
His 12-year tenure as Levi’s CEO (2011–2024) is widely regarded as one of the most successful corporate turnarounds in modern retail.
Bergh transformed a stagnating “heritage” brand into a global, digital-first lifestyle leader.
His key achievements include a financial turnaround and the 2019 IPO, a move away from department stores, the revitalization of the women’s business, and the purchase of Beyond Yoga in 2021.
“When I joined the company, we were basically a men’s denim bottoms business sold in US wholesale … after I joined, we put a strategy in place that fundamentally was to protect our profitable core business, which is that men’s bottoms business, but to begin to expand the Levi’s brand and Levi’s portfolio further,” Bergh told me just before he retired as Levi’s CEO on Jan. 29, 2024.
“We needed shock absorbers to absorb all of the potential disruption that could be coming,” he added.
Bergh is arguably parachuting into rockier waters at Lululemon than when he joined Levi’s.
The company’s business strategy is being grilled by outspoken founder and major shareholder Chip Wilson. His public ripping of Lululemon’s strategy recently led to the departure of CEO Calvin McDonald and the arrival of feared activist investor Elliott Management as a shareholder.
Lululemon stock has crashed 51% in the past year.
Lululemon is being led on an interim basis by co-CEOs Meghan Frank and André Maestrini. One source said Lululemon would like to find an external hire to assume the CEO position full-time.
Meanwhile, the brand’s once-formidable market share in sportswear has been eroded by frequent product missteps under McDonald. The lack of consistent execution has led to the growing popularity of newer sportswear brands like Alo and Vuori.
Lululemon reported that fourth quarter sales in the Americas fell 4% — US sales dropped 6%, while Canada rose 1%. First quarter EPS guidance clocked in at $1.63 to $1.68. The Street was looking for EPS of $2.09.
“Still downward dog … nothing to get excited about here yet. CEO choice is key,” Jefferies analyst Randy Konik said in a note. “We continue to view the CEO gap as the biggest overhang. The board says it is running a robust search process, and provided no timing. Until a credible CEO is in place to reset strategy, org design, and accountability (especially in North America) investors are left underwriting hope.”
