December 26, 2025
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Who Should Lululemon’s Next CEO Be?
Activist investor Elliott Management, after acquiring a sizeable stake in Lululemon’s stock, suggested Jane Nielsen, former CFO and COO at Ralph Lauren, as an ideal candidate to replace current CEO Calvin McDonald.
Last week, Lululemon announced that McDonald, its CEO for the past seven years, will step down at the close of the current fiscal year as the yoga-themed retailer faces slower growth, new competition, and rising costs.
According to the Wall Street Journal, Elliott has been working with Nielsen on the Lululemon opportunity for months. Sources told the publication that Elliot, who left Ralph Lauren at the end of March, sees her as a “retail pro that can help revitalize the Lululemon brand.”
While at Ralph Lauren, shares more than doubled, and profit margins significantly improved as the sportswear-maker scaled back discounting. Before joining Ralph Lauren in 2016, Nielsen was the CFO at Coach, where the brand subsequently closed underperforming stores and rationalized inventories to revive sales growth.
Nielsen said in a statement to the WSJ, “Lululemon is one of the most powerful brands in retail, defined by exceptional products, deeply engaged communities and significant global potential. I would welcome the chance to discuss this opportunity with the Lululemon board.”
One fan of the potential hire is Needham analyst Tom Nikic, who said in a note following news of Elliott’s investment, “Given her immense success at RL and Coach, we think she could help reinvigorate LULU if she were to come aboard.”
Asked on the retailer’s third-quarter analyst call last week on what qualities Lululemon was looking for in its next CEO, CFO Meghan Frank said the board is focused on “a leader with experience in growth and transformation.”
Lululemon Mulls New CEO Philosophy
Following news of McDonald’s soon departure, Chip Wilson — Lululemon’s founder and a major shareholder — said the retailer needs an “infusion of new skills to get back to being a product-first company.”
In a Heard on the Street column entitled, “What Does Lululemon Need: Discipline or Inspiration?,” Jinjoo Lee speculated on whether Lululemon would benefit from a disciplinarian, such as Nielsen. She pointed to some considered missteps by Lululemon in recent years, including the acquisition of at-home fitness platform Mirror, its risky extensions into footwear and loungewear, and questionable tie-ups with Mickey Mouse and the NFL.
However, Lee added that turnarounds at Gap and Abercrombie & Fitch have been led by CEOs with strong product and design backgrounds. She noted that Lululemon scored hits beyond women’s leggings with ABC men’s trousers and belt bags. She wrote, “Sometimes it requires a creative type to revive a brand.”
A Bloomberg article stated that Lululemon’s primary challenge will be rebuilding brand heat with upstarts such as Alo Yoga and Vuori taking share, although Lululemon’s current management believes increasing the frequency and breadth of new styles will return its U.S. business to growth.
BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Neil Saunders
Managing Director, GlobalData
Peter Charness
Retail Strategy - UST Global
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Discussion Questions
Does Lululemon need more discipline or creativity from its next CEO?
What skillsets and leadership qualities should the retailer be looking for? Does Jane Nielsen fit the bill?
Poll
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Activist investor Elliott Management
Is there a grimmer way to start a sentence than with those four words (or really the first two, followed by any name)?
To put a little prespective on this, their “sizeable stake” is described as being about $1B..or 4% of the value of the company. So yes, they – along with any other shareholder – can suggest whoever they want; (I believe there’s some kind of virtual suggestion box for ideas.) If they expect their choice to be given undue consideration, then they should consider buying another 46%. (otherwise please confine themselves to the visitor’s gallery.)
It’s the product stupid (so to speak). Relentless discipline and execution without product is just a lot of well run meetings about nothing the customer cares about.
Lululemon doesn’t have a capability problem—it has a clarity problem. The next CEO must restore product authority and brand heat while re-imposing operating discipline. Jane Nielsen brings proven rigor in margin, inventory, and focus—but discipline alone won’t be enough. The real question isn’t discipline vs. inspiration—it’s whether Lululemon can reconnect innovation to its core community at global scale.
No doubt, Lululemon has a reputation. Going back to what brought the company to the dance is a reasonable strategy, provided that’s what the customer wants. And speaking of customers, we should always start with the customer in mind. From there, work backwards.
And today’s market is much different than even seven years ago. The competition is growing. COVID-19 and the economy still affect pricing strategies. Consumers’ needs are different.
Today, a disciplined approach to how the company is run will be the first step toward a potential turnaround. But if the customer doesn’t want what Lululemon is selling, the disciplined approach (or any approach) won’t matter.
The central problem for Lululemon is a lack of innovation and oomph in its assortments, which has been present for some time. This has meant Lulu has lost its edge at a time when competitors have become better and more compelling. As the problem is with product, someone with a merchant background would be beneficial to the brand.
Lululemon created a market category that has now spawned numerous competitors, and those competitors are naturally eating away at Lulu’s growth rate and market share. That was going to happen under the best of circumstances, so all the bad press and finger wagging sounds a little harsh to me. The business tripled in size under his tenure, all while new and formidable competition came into the market. And if Lulu hadn’t experimented with different initiatives, they’d have been criticized for a lack of initiative against that new competition.
Maybe Jane Nielsen does indeed have the chops to be Lulu’s next CEO. But that would be because she can be a brand visionary, not necessairly because of success as a CFO/COO. Execution of a vision is not the same as authoring a vision. That’s what’s so great about strong CEO/COO teams. Complementary skill sets. Left brain + right brain. Managing merchandising and marketing is not the same as managing the balance sheet and operations side of the business. Rebuilding brand heat is not something that will be driven by discipline alone. Brand heat and discipline are not mutually exclusive, but it will take more than discipline to reignite Lulu’s brand heat. The competition these days is formidable.
Lululemon hasn’t lost its operational footing, but it has lost some product momentum and brand sharpness in the U.S. They’d benefit from bringing in a CEO with a stronger creative lens. Discipline still matters, but what’s missing right now is a clearer product direction that makes the assortment feel fresh again.
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Is there a grimmer way to start a sentence than with those four words (or really the first two, followed by any name)?
To put a little prespective on this, their “sizeable stake” is described as being about $1B..or 4% of the value of the company. So yes, they – along with any other shareholder – can suggest whoever they want; (I believe there’s some kind of virtual suggestion box for ideas.) If they expect their choice to be given undue consideration, then they should consider buying another 46%. (otherwise please confine themselves to the visitor’s gallery.)
It’s the product stupid (so to speak). Relentless discipline and execution without product is just a lot of well run meetings about nothing the customer cares about.
Lululemon doesn’t have a capability problem—it has a clarity problem. The next CEO must restore product authority and brand heat while re-imposing operating discipline. Jane Nielsen brings proven rigor in margin, inventory, and focus—but discipline alone won’t be enough. The real question isn’t discipline vs. inspiration—it’s whether Lululemon can reconnect innovation to its core community at global scale.
No doubt, Lululemon has a reputation. Going back to what brought the company to the dance is a reasonable strategy, provided that’s what the customer wants. And speaking of customers, we should always start with the customer in mind. From there, work backwards.
And today’s market is much different than even seven years ago. The competition is growing. COVID-19 and the economy still affect pricing strategies. Consumers’ needs are different.
Today, a disciplined approach to how the company is run will be the first step toward a potential turnaround. But if the customer doesn’t want what Lululemon is selling, the disciplined approach (or any approach) won’t matter.
The central problem for Lululemon is a lack of innovation and oomph in its assortments, which has been present for some time. This has meant Lulu has lost its edge at a time when competitors have become better and more compelling. As the problem is with product, someone with a merchant background would be beneficial to the brand.
Lululemon created a market category that has now spawned numerous competitors, and those competitors are naturally eating away at Lulu’s growth rate and market share. That was going to happen under the best of circumstances, so all the bad press and finger wagging sounds a little harsh to me. The business tripled in size under his tenure, all while new and formidable competition came into the market. And if Lulu hadn’t experimented with different initiatives, they’d have been criticized for a lack of initiative against that new competition.
Maybe Jane Nielsen does indeed have the chops to be Lulu’s next CEO. But that would be because she can be a brand visionary, not necessairly because of success as a CFO/COO. Execution of a vision is not the same as authoring a vision. That’s what’s so great about strong CEO/COO teams. Complementary skill sets. Left brain + right brain. Managing merchandising and marketing is not the same as managing the balance sheet and operations side of the business. Rebuilding brand heat is not something that will be driven by discipline alone. Brand heat and discipline are not mutually exclusive, but it will take more than discipline to reignite Lulu’s brand heat. The competition these days is formidable.
Lululemon hasn’t lost its operational footing, but it has lost some product momentum and brand sharpness in the U.S. They’d benefit from bringing in a CEO with a stronger creative lens. Discipline still matters, but what’s missing right now is a clearer product direction that makes the assortment feel fresh again.