Lululemon shares up after Elliott Management builds US$1B stake, seeks CEO change

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TORONTO — Activist investor Elliott Management has built a stake of more than US$1 billion in Lululemon Athletica Inc. and is pushing for the struggling retailer to name former Ralph Lauren executive Jane Nielsen as its next chief executive.

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A source familiar with the situation confirmed media reports that Elliott has been working with Nielsen, a former chief financial officer and chief operating officer at Ralph Lauren, for the past few months to support her candidacy.

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Nielsen, who spent nine years at the fashion brand before departing earlier this year, also previously served as executive vice-president and chief financial officer at Coach.

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The source said Nielsen’s experience at those two companies makes her well-positioned to turn things around at Lululemon, noting her track record for revitalizing iconic brands.

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Elliott attributes Lululemon’s recent struggles partly to increased competition, which has prompted it to offer discounts on more of its products. It also points to the retailer’s increasing pivot to ventures outside its core business.

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That includes recent collaborations with the NFL and Disney, which have seen it release clothing lines featuring football team logos and Mickey Mouse, along with selling more beauty and skin care products.

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Earlier this month, Lululemon announced current CEO Calvin McDonald would step down from his role effective Jan. 31, with CFO Meghan Frank and COO Andre Maestrini then serving as interim co-CEOs until the company’s board of directors finds its next leader.

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McDonald had been at the helm of the Vancouver-based company for seven years and will serve as a senior adviser through March 31 of next year.

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He said on an earnings call that Lululemon’s current product mix, particularly in North America, does not reflect the company’s vision for the future.

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During the third quarter, Lululemon said revenue fell in its U.S. and Canadian businesses by three per cent and one per cent, respectively, but saw a 46 per cent rise in its revenue from China.

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In September, while reporting its second-quarter results, Lululemon updated its guidance for 2025 with an estimated reduction in gross profit. It said the move reflected the impact of tariffs and the removal of the de minimis exemption, which had allowed packages worth US$800 or less to ship south of the border without duties.

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The source said Elliott is confident that Nielsen can return Lululemon to its former model as a high-end women’s athleisure brand by focusing on its core customer base.

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Lululemon founder Chip Wilson, who remains a large shareholder in the company, has also raised concerns about the company and pushed for changes. He has said the CEO search should be led by new, independent directors.

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The source said that while Elliott agrees with Wilson that changes are needed, the investment fund is not working with him on the matter.

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Lululemon shares were up US$13.48 or about 6.5 per cent at US$221.35 in early-afternoon trading Thursday on the Nasdaq.

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This report by The Canadian Press was first published Dec. 18, 2025.

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