Canadian activewear retailer and manufacturer Lululemon has announced its CEO Laurent Potdevin is resigning effective immediately amid unspecified misconduct.
Potdevin, who has been with the company for four years, will also resign from the board.
The board, led by glenn Murphy, executive chair, has already begun searching for his replacement.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct,” the retailer stated.
According to Murphy, while it was a difficult and considered decision, the board thanks Laurent for his work in strengthening the company and positioning it for the future.
“Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organisation,” he said.
“Protecting the organisation’s culture is one of the board’s most important duties.”
Three of Lululemon’s senior leaders are being elevated and will take on additional responsibilities, reporting to Murphy.
Celeste Burgoyne, executive vice president, Americas, will oversee all channel and brand-facing aspects of the global business, including stores and e-commerce, as well as brand marketing; Stuart Haselden, chief operating officer, will have responsibility for all operations related to finance, supply chain, people, and technology; and Sun Choe, senior vice president of merchandising, will guide all aspects of product development, design, innovation, and merchandising.
Murphy said the company is confident that Burgoyne, Haselden and Choe will continue to execute on Lululemon’s growth strategy and drive global performance.
“Based upon their contributions to the recent expansion of the business, their history of collaboration with one another and their strong support across the Lululemon organisation, we believe this trio of leaders will take Lululemon from strength to strength,” he said.
The retailer also reaffirmed its updated guidance provided on January 8 and said the company’s growth strategies remain on track to achieve $4 billion in revenue in 2020.
While the reasons for the departure of Potdevin are unclear, his exit is a blow to Lululemon, according to Neil Saunders, managing director of analysis firm GlobalData Retail.
“During his tenure, Mr. Potdevin oversaw the steady expansion of Lululemon through both calm and rough periods in the athleisure market,” he said.
“His innovative approach and his clear sense of Lululemon’s values and essence is one of the reasons the company has enjoyed continued success, even while other sporting brands struggle to generate growth.
“Although we see executive chairman Glenn Murphy as a capable pair of hands in the short term, Lululemon needs a CEO to guide it as it expands overseas and tries to make further gains in its home market. It is crucial that the right person is selected, but it is equally appointment that the task is undertaken with urgency so that Lululemon doesn’t lose momentum.”
Saunders said the announcement is vague and damaging to the retailer’s image.
“Lululemon owes it to investors and to customers, to be clear about the reasons Mr. Potdevin was made to depart. As a company that prides itself on transparency and openness, we would expect it to have an honest conversation with stakeholders. Failure to do so will likely lead to speculation which could ultimately harm the brand,” he said.
