Founder Chip Wilson, still holding 7 percent of Lululemon, forced the board to admit two of his director nominees after a standoff over his public criticism. In exchange, Wilson agreed to cease disparaging the company for 18 months. Shares have slumped 75 percent from their 2023 peak, prompting investors to question the brand’s dilution after high‑profile deals like Disney and raises governance concerns.

Lululemon’s sales grew from $2 billion to $11 billion since Wilson left, yet same‑store revenue in its core Americas fell 3 percent in 2025 and analysts forecast a 5 percent decline in 2026. Inventory rose 18 percent, signaling excess stock and cash drain. A new CEO from Nike will tackle merchandising, but competition from Vuori and Alo intensifies pressure and underscores the urgency of cost cuts.

Despite the slump, Lululemon carries virtually no net debt and generated $1 billion in free cash flow last year, leaving a buyout option on the table. Wilson’s board seat gives him direct oversight of shareholder interests, but the market’s appetite for a leveraged takeover remains uncertain. Investors will watch the board’s next moves closely.