Lululemon Athletica Inc. named Heidi O’Neill its new chief executive officer on Wednesday as the athletic retailer looks to move beyond a turbulent period of slowing growth and investor unrest.
O’Neill, who was most recently Nike Inc.’s president of consumer, product and brand, will take over as permanent CEO on September 8, the company said in a statement. Calvin McDonald, who had led Lululemon since 2018, left his post in January and went on to lead a beauty business.
Lululemon shares dropped as much as 7% in postmarket trading. The shares had fallen more than 21% so far this year as of Wednesday’s close.
O’Neill arrives with a series of fires to put out. Recent product mishaps, including selling leggings that were see-through, and a disappointing sales outlook, have left investors concerned that the company can pull itself out of a rut. Sales growth has slowed since losing share to trendier competitors.
Elliott Investment Management has built a stake of more than $1 billion in the company. Jane Nielsen, a former Ralph Lauren Corp. executive, was Elliott’s preferred candidate for Lululemon’s top job.
Lululemon’s founder, Chip Wilson, who no longer has a formal role with the company but is one of its biggest shareholders, has also publicly criticized the company and pushed for changes on its board.
While at Nike, O’Neill was considered to be an internal prospect to replace former Chief Executive Officer John Donahoe, Bloomberg Businessweek previously reported.
