Lululemon's Controversial Founder Is Taking A Big Step Back And It's Great For The Company

YouTube/lululemonAfter a rough year that saw a scandal over sheer yoga pants, the departure of its popular CEO, and offensive comments from its founder Chip Wilson, Lululemon announced a much needed management shakeup.

Not only is a new CEO, Laurent Potdevin stepping in, but the often controversial Chip Wilson will no longer be Chairman, though he'll maintain a board seat.

"I will be reporting to the board and not to Chip," Potdevin told the Wall Street Journal in an interview.

That's key. Wilson nominally stepped back when he gave up his position as CEO, but was still an outsize presence at the company he created. His presence and influence created significant friction with outgoing CEO Christine Day.

Beyond the PR issues, the company faces real competitive problems. There's a perception that quality has declined, and lower priced competitors like Gap's Athleta are becoming increasingly popular.

There are a few reasons to think that Potdevin, formerly President at Toms Shoes, CEO at Burton Snowboards, an an executive at LMVH, might be the guy to help the company turn things around.

• Wilson stepping back is at minimum good news on the public relations front, given his tendency towards gaffes.
• It also signals that Potdevin will have more autonomy - Wilson once put an Ayn Rand quote on the company's bags, sparking an uproar, without his CEO's knowledge. Potdevin could be the first outsider to have real control.
• According to Brian Sozzi, CEO and Chief Equities at Belus Capital Advisors, he'll be an "easy sell" to the Lululemon customer base after coming from the socially responsible Toms brand, and could help smooth over Wilson's flubs.
• "He's an operations guy," Sozzi says, "this is a critical time for Lululemon, it has to ensure its brand message (well-made technical product) is able to be driven consistently on an increasingly global scale. The new CEO has an extensive background in ground level retail operations."
• Potdevin has already taken over from a larger than life founders of iconic brands more than once, replacing Jake Burton Carpenter at Burton Snowboards in 2005, then getting hired by Toms Shoes founder Blake Mycoskie to run the business.