lululemon athletica (NASDAQ:LULU) is finally free of its controversial founder and former CEO, Chip Wilson. Though the stock slid lower yesterday after Wilson announced his departure from Lululemon's board of directors, the move is key for the company and its shareholders. For starters, Wilson was something of a live wire, particularly when it came to speaking with the press. Few can forget his offensive comments over Lululemon's sheer pants snafu, in which Wilson argued that some women's bodies simply don't work in the company's tight-fitting yoga pants .
Here's a look at Wilson's turbulent reign and why his final goodbye is a win for shareholders.
A long and troubled breakup
The yoga-apparel retailer has been trying to cut ties with its opinionated founder for some time now. In 2011, he butted heads with Lululemon's board and then-CEO Christine Day over certain creative decisions, including placing quotes from Atlas Shrugged on shopping bags. This came back to bite him when the company was forced to pull the bags due to customer complaints about the brand's newfound messaging.
Wilson then stepped down as chairman in 2013, following the company's late 2012 recall of more than 17% of its signature luon pants for being too sheer, along with his subsequent remarks about women's bodies. However, that wasn't the end of Wilson's on-again, off-again relationship with Lululemon.
Wilson shook things up again last June when he started a very public battle with Lululemon's board. At the time, he used his then-28% stake in the company to vote against two of its board members. There were rumors Wilson wanted to take Lulu private. However, by August he had reversed course and instead sold half of his stake in the company to a private equity firm.
Fast-forward to today and it seems Wilson has officially washed his hands of the company he founded in 1998.
A future without Chip
Ultimately, Wilson's exit should enable Lululemon to better focus on rebuilding its brand and combating competition in the space. While Wilson was both innovative and visionary in Lulu's early days, there is no denying his involvement in recent years had become a major distraction for Lululemon and its board. At the very least this will mean less controversy for the yoga-apparel maker. Moreover, it marks a new chapter for Lululemon and its shareholders, and perhaps the official start of a long-overdue recovery.