June 13, 2013 / 8:03 PM / 6 years ago

Lululemon's Day says CEO search under way, other executives to be named soon

TORONTO (Reuters) - Lululemon Athletica Inc’s LLL.TO (LULU.O) outgoing chief executive said on Thursday the upscale yogawear retailer has begun its search for a new leader and will soon fill other senior positions.

Pedestrians walk past a Lululemon Athletica store in New York, March 19, 2013. REUTERS/Lucas Jackson

A chief executive search firm has been selected, Christine Day told an investor conference in Chicago.

Day stunned markets on Monday when she said she would step down once a replacement was found. Lululemon shares have plummeted some 20 percent since.

The stock was up 4.3 percent at $67.12 on the Nasdaq and up nearly 4 percent at C$68.22 in Toronto trading.

Day’s departure follows the March recall of the company’s signature yoga pants because they were too see-through, which led to the departure of its chief product officer and put a blemish on Day’s leadership.

“I want to give you that assurance that morale is high, that we’re connected, and the reality is, I’m coming back to work on Monday. And I’m there until the next CEO is in place. So it is business as usual for us at Lululemon,” said Day. She said earlier she notified the board only last Friday of her decision.

Analysts who spoke to company directors have said they were convinced Day was not forced out.

“We interviewed three Board members and it was clear all were enthralled by Ms. Day, her contribution to the (company) and LULU’s performance,” said John Zolidis, an analyst with The Buckingham Research Group, in a research note.

Day, a former Starbucks executive, was behind the Vancouver-based company’s extraordinary growth over the last half decade, turning a niche retailer into a high-profile international brand with big ambitions.

For many shoppers and investors, Day embodied Lululemon, with its distinctive community-oriented culture and fiercely loyal customers.

“(The board) took a chance on me. You know, I was a first-time CEO, but they saw the qualities in me that have created the last five years. And I am confident they will see the qualities in the next person to deliver the next five and 10 years,” said Day. “I am not the culture of Lululemon.”

Day also said that the search to fill other senior executive positions was winding down. The vacated chief product officer was split into two roles, while a new logistics role was added.

Lululemon is halfway through its process of finding an executive vice president of design and merchandising. It has narrowed its search for the senior vice presidents of product operations and logistics to two candidates each.

It also posted about its CEO search on its Facebook page, with a big red picture with the message “CEO wanted, apply within.” By Thursday afternoon, the picture had attracted 1,448 likes and 247 shares.

Reporting by Solarina Ho; Editing by Janet Guttsman and Nick Zieminski

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