Disgraced Founders Fight for Control of Their Companies
Lululemon founder Chip Wilson is at a crossroads.
After stepping down as chairman of the trendy athletic-wear company last month, the former CEO is weighing his options for how to use his 28 percent stake to influence Lululemon's operations going forward.
Wilson's choices include partnering with a private equity firm in a buyout of the company, launching a proxy battle to gain additional board seats, or selling his stake, The Wall Street Journal reports. The prospect of a contentious power struggle within Lululemon gained traction earlier this month when Wilson voted against two of the company's high-profile executives, including the new chairman.
Though different in circumstances, the situation Wilson faces resembles that of embattled American Apparel founder Dov Charney, who was removed from his company last week but maintains a 27 percent ownership stake. When Lululemon customers complained that the brand's yoga pants were too see-through, Wilson got into hot water by explaining that some people aren't skinny enough to wear them; he stepped down from his position about a month ago. Charney has been implicated in a number of lawsuits citing inappropriate sexual behavior with female employees. Last week, American Apparel's board voted to fire him.
Founders who go head to head with their boards often wind up getting less than they bargained for. Ezra Dabah, former CEO of the Children's Place, gave up his proxy war with the company in 2009 after advisers recommended stockholders vote in favor of the company, according to the Journal's report.
Both Wilson's and Charney's plans for their respective companies remain to be seen, but neither is expected to sell.