Lululemon Athletica Inc. has begun a search for a new chief executive as longtime CEO Calvin McDonald prepares to step down amid prolonged performance challenges in the company’s core North American market.
The athleisure retailer said McDonald will step down as CEO and board member effective Jan. 31.
CFO Meghan Frank and chief commercial officer André Maestrini will serve as interim co-CEOs while the board conducts a formal search for a permanent successor.
McDonald has led Lululemon since 2018, overseeing a period of rapid growth that transformed the brand into a global athleticwear powerhouse.
However, the company has struggled for more than a year, with softness most pronounced in the Americas.
The leadership change was announced the same day Lululemon reported third-quarter results showing mixed performance.
Net revenue rose 7% to $2.6 billion, but comparable sales in the Americas declined 5%, offset by an 18% jump in international comps. Net income fell to $306 million from $351.9 million a year earlier.
Lululemon’s stock has also come under pressure. The company’s market capitalization peaked at roughly $64 billion less than two years ago, but has since fallen by approximately $42 billion, according to WWD.
In recent months, company founder Chip Wilson has publicly criticized McDonald and Lululemon’s board, citing a lack of innovation and strategic urgency.
In October, Wilson took out a full-page advertisement in The Wall Street Journal titled “Lululemon: In a Nosedive,” arguing that the brand had “lost its edge.”
Lululemon said its board is conducting a comprehensive CEO search with the help of a leading executive search firm. McDonald will remain with the company as a senior advisor through March to support the transition.
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As part of the leadership changes, board chairman Marti Morfitt will assume the expanded role of executive chair, effective immediately, to help ensure continuity of the company’s near- and long-term strategy.
“On behalf of the board and the entire organization, I want to thank Calvin for his visionary leadership building Lululemon into one of the strongest brands in retail,” Morfitt said.
“As we look ahead, the board is focused on identifying a leader with a proven track record of guiding companies through periods of growth and transformation.”
During McDonald’s tenure, Lululemon more than tripled its annual revenue and is expected to generate approximately $11 billion this fiscal year.
He expanded the brand’s global footprint to more than 30 markets, grew mainland China into the company’s second-largest market, and broadened the product assortment into categories such as tennis and golf.
“Serving as CEO of Lululemon has been the highlight of my career,” McDonald said. “I’m incredibly proud of what our team has accomplished and believe the product pipeline and action plans we’ve put in place will deliver value in the months and years ahead.”
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