Lululemon founder Chip Wilson will sell half of his stake in the company to put an end to a potentially brutal clash between himself and investors.
As per their agreement, investment firm Advent International will pay Wilson $845M for 20.1 million shares. That transaction reduces Wilson’s stake in Lululemon from 28% to just 14%. In June, Wilson lashed out at Lululemon’s board and made the force exit of directors and a hostile takeover a possibility.
Two familiar faces will fill seats on the Lululemon board; David Mussafer, Advent’s managing partner, and Steve Collins, Advent’s managing director. Advent was a major investor in Lululemon until it sold its stake in the company in 2009.
Lululemon Chairman Michael Casey said, “We welcome the opportunity to work with David and Steven, who have significant specialty retail experience and are deeply familiar with Lululemon’s unique culture.”
The company suffered a tremendous setback when many felt their pants were too transparent and had revealed too much. Addressing that problem and correcting it cost them millions of dollars and made investors shaky about quality control. Lululemon’s shares have fallen by more than 40% since the transparency incident in 2013. Wilson’s made problems worse during a TV interview, when he suggested that the pants “don’t work for some women’s bodies.” Wilson later apologized for his harsh statement.
Chip Wilson via flickr/Raj Taneja
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