Lululemon appoints former Nike executive O’Neill as its next CEO

(SeaPRwire) –   Lululemon Athletica Inc. announced the appointment of Heidi O’Neill as its new chief executive officer on Wednesday, as the athletic apparel retailer seeks to navigate past a challenging phase marked by decelerating growth and investor dissatisfaction.

According to a company statement, O’Neill, who previously served as Nike Inc.’s president of consumer, product and brand, will assume the permanent CEO role on September 8. Her predecessor, Calvin McDonald, departed the company in January after leading it since 2018 to take the helm of a beauty enterprise.

The company’s stock declined by up to 7% in after-hours trading. This follows a drop of more than 21% in the share price year-to-date as of the market’s close on Wednesday.

O’Neill steps into the position facing several immediate challenges. Investor confidence has been shaken by recent product issues, such as the sale of see-through leggings, coupled with a weak sales forecast, raising doubts about the company’s ability to regain its momentum. Sales expansion has lost pace as the company ceded market share to more fashionable rivals.

Elliott Investment Management has accumulated a stake valued at over $1 billion in Lululemon. The activist investor had favored Jane Nielsen, a former Ralph Lauren Corp. executive, for the CEO position.

Chip Wilson, the founder of Lululemon who remains a major shareholder despite holding no formal role, has also been vocal in his criticism of the company and has advocated for changes to its board of directors.

Bloomberg Businessweek had previously reported that during her tenure at Nike, O’Neill was viewed as a potential internal successor to former CEO John Donahoe.