Will the Drama Ever End for Lululemon?

lululemon athletica's (NASDAQ: LULU  ) founder, Chip Wilson, is shaking things up at the company again -- only this time, it could actually benefit shareholders. Lululemon's stock price climbed nearly 3% yesterday on rumors that Wilson may attempt to take the yoga apparel retailer private. The Canadian native is reportedly consulting Goldman Sachs about possible options to gain more influence over the company's operations, according to The Wall Street Journal.

Separation anxiety
Perhaps Wilson is feeling a bout of separation anxiety from the athletic apparel company he started 16 years ago. He was, after all, pressured into resigning from his post as chairman of the board following a slew of missteps that included an offensive comment in which he argued that some women's bodies simply don't work in yoga pants. In fact, aside from founding the beloved athletic apparel brand, it is difficult to find any significant positive contributions made by Wilson in recent years.

Wilson is no stranger to controversy. Unfortunately, his antics have turned Lululemon into one of the most controversial retail stocks on the market today. Just two weeks ago, he publicly attacked Lululemon's management by using his 28% stake in the company to vote against two of its board members.

In regard to his opposition of Lululemon's new chairman, Michael Casey, and the re-election of another board director, Wilson said, "Change is now needed at the board level to increase shareholder value." The company fired back, saying, "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."

These are just a few of many examples in which Wilson's actions or comments have gotten him, and by association Lululemon, into trouble. However, this time around, his options are much more limited and thus could result in a positive outcome for Lululemon shareholders.

When bad leaders happen to good brands
Having Chip Wilson in the equation has been bad news for the retailer in recent years. Yet current Lululemon shareholders could receive a premium to where the stock trades today, at around $41 a share, if Wilson were to work with a private equity firm to purchase Lululemon in a buyout deal.

Nevertheless, taking the company private would mean paying a premium above Lululemon's current market value of $5.9 billion. That would be a sizable buyout, despite the stock's 30% decline so far this year. There is also a chance that Wilson could sell his stake in the company, according to the Journal. This would most likely send Lululemon's stock soaring, as it would sever the retailer's ties with its controversy-ridden founder. Ultimately, Lululemon can expect further controversy as long as Chip Wilson is nearby. The board has not received a specific proposal from Wilson at this point. However, one thing that shareholders can be sure of is that change is coming.

Lululemon has new leadership at the top, and appears to have a fresh perspective on what consumers want. Moreover, now that the company's new chief executive, Laurent Potdevin, has had a few quarters to settle into his new role as CEO, investors should start to see a turnaround in Lululemon's operations. For now, shareholders will want to keep an eye on how the company's latest drama pans out and whether Lululemon can rid itself once and for all of Chip Wilson.

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