Lululemon’s CEO resigns over issue of conduct

NEW YORK (AP) — Lululemon Athletica Inc. announced Monday that Laurent Potdevin has resigned as CEO effective immediately, saying he fell short of the company’s standards of conduct.

The Vancouver-based maker of yoga pants and other athletic-inspired clothing didn’t offer specifics but said it expects all employees to “exemplify the highest level of integrity and respect for one another.” A person familiar with the situation who spoke on condition of anonymity because of not being authorized to speak publicly said it was not a single event but “a range of instances” at issue, none of which involving the financial or operational aspects of the business.

Lululemon said it has begun the search for a successor.

Potdevin became CEO in January 2014 at the company whose products have been aimed mainly at women. He led the rebuilding of Lululemon’s brand after a major flub — thousands of stretchy black yoga pants were recalled after customers complained that they were too sheer — cost the company millions and sent the stock tumbling. A previous CEO, Christine Day, had left citing personal reasons. And founder Chip Wilson resigned as chairman in 2015 after suggesting that some women’s bodies were not made for Lululemon’s clothing.

Potdevin also has resigned from the company’s board. In the interim, Glenn Murphy has been elevated to executive chairman, previously co-chairman and a member of the board since April 2017. Three senior members have also taken on expanded roles and will report directly to Murphy.

“While this was a difficult and considered decision, the board thanks Laurent for his work in strengthening the company and positioning it for the future,” said Murphy. “Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the board’s most important duties.”

Lululemon has agreed to pay Potdevin $3.35 million in cash now and $1.65 million over a period of 18 months in monthly installments, according to a filing with the Securities and Exchange Commission.

Analyst Neil Saunders, managing director of GlobalData Retail, called on the company to be more clear about the reasons for Potdevin’s departure and said failing to do so would cause speculation that would “ultimately harm the brand.”