UPDATE 5-Lululemon founder turns on board, votes against new chairman

Wed Jun 11, 2014 5:36pm EDT
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(Adds vote results, details of situation)

By Allison Martell and Euan Rocha

TORONTO, June 11 (Reuters) - Lululemon Athletica Inc's founder and biggest shareholder, Chip Wilson, lashed out at the yogawear retailer's board on Wednesday, saying the company's new chairman and another director are too focused on short-term growth and that he had voted against them in board elections.

Just hours ahead of the company's annual meeting in Vancouver, Wilson issued a press release praising Lululemon's new management team, but saying the board is "heavily weighted towards short-term results at the expense of product, culture and brand and longer-term corporate goals."

Wilson, who remains on the board and owns a 27 percent stake in the company, said he had voted not to elect Lululemon's new chairman, Michael Casey, or director RoAnn Costin.

Spots on Lululemon's board are awarded to nominees who receive the most votes. With no alternative candidates to Casey or Costin, there was no way for Wilson's vote to change the outcome of the meeting. Lululemon said all board nominees had been elected, but did not immediately release vote counts.

The company, which is pursuing international expansion in the face of growing competition, said in a statement that its board and management are committed to shareholder value.

"Contrary to Mr. Wilson's assertions, Lululemon's board members are aligned with the company's core values and possess the necessary expertise to successfully lead Lululemon forward," the statement said.

Vancouver-based Lululemon has been struggling in the aftermath of an embarrassing recall of see-through yoga pants announced in March 2013. Once a market darling thanks to its rapid sales growth, it is expected to report little or no gains in same-store sales when it releases financial results on Thursday morning.   Continued...