UPDATE 1-Lululemon hires Kmart executive as product chief

Wed Oct 30, 2013 5:44pm EDT
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By Solarina Ho and Susan Taylor

TORONTO Oct 30 (Reuters) - Lululemon Athletica Inc , the fast-growing retailer of premium workout clothes, has hired an executive from U.S. discount chain Kmart to lead its global merchandising and design team, but offered no news on its hunt for a chief executive.

In the wake of a costly and embarrassing recall of overly sheer yoga pants this spring, Lululemon has hired a handful of new senior managers, but its CEO search, begun in June, continues.

The Vancouver-based company announced on Wednesday the appointment of Tara Poseley, a yoga fan and a 25-year industry veteran who was most recently president of Sears Holdings Corp's Kmart apparel division, as its new chief product officer (CPO). Poseley also spent 15 years at Gap Inc.

Lululemon's volatile stock dropped more than 3.5 percent after the news on concerns about the appointment and on investor disappointment that the company has not yet found a replacement for CEO Christine Day.

"I thought they were interviewing them both simultaneously and the new CEO would have to sign off on the new CPO. That didn't happen," said Sterne Agee analyst Sam Poser.

"Hopefully, the new CEO thinks as highly of her as the existing management. That would be the scary part."

The appointment of an executive from a discount chain does not suggest that Lululemon cannot attract top-tier talent, several analysts said.   Continued...