Lululemon Athletica Chief Executive Calvin McDonald will step down in January, according to the athletic gear maker, which has been under pressure from its founder to make changes to reverse its “loss of cool.”
McDonald will also relinquish his board seat but remain a senior adviser through March to facilitate a smooth transition, the company said.
Lululemon will conduct a search for his replacement. In the meantime, Meghan Frank, finance chief, and André Maestrini, chief commercial officer, will serve as interim co-CEOs. Chairman Marti Morfitt will take on the expanded role of executive chairman.
Lululemon was an upstart that revolutionized athletic apparel with its leggings that were so functional and flattering that women wore them not just to yoga class but brunch, the supermarket and just about everywhere else.
McDonald, who had served as an executive at the beauty chain Sephora, took the helm of the Vancouver-based Lululemon in 2018 and steered it through the pandemic, tripling its annual sales during his tenure to $10.6 billion.
More recently, though, the company’s U.S. sales have faltered and it has come under attack by founder Chip Wilson, who has blamed the “loss of cool” on the kind of CEO who can “speak Wall Street” but is killing innovation.
On Thursday, Lululemon reported a 7% increase in net sales to $2.6 billion for the period that ended Nov. 2. All that growth came from international markets, however. In the Americas, net revenue fell 2%.
To date this year, Lululemon shares have fallen more than 50%, erasing $26.6 billion in market capitalization, according to FactSet.
McDonald’s departure may not satisfy Wilson, who founded the company in 1998. He has mostly called for a board shake-up.
“He hopes for a reformed board that is infused with people who are entrepreneurial, creative, have technical apparel experience, lead with innovation, and have a founder mentality,” Wilson’s spokeswoman Andrea Mestrovic told The Wall Street Journal last month.
Under McDonald, Lululemon grew its store base, which now numbers more than 780 worldwide. It also entered new international markets, built its men’s business and expanded further into new categories such as tennis and golf.
Yet some recent decisions have raised eyebrows among analysts and customers, including deals to sell apparel emblazoned with Mickey Mouse or NFL logos.
“Lulu’s NFL partnership looks less like a bold growth initiative and more like a Hail Mary from a management team struggling to regain momentum,” said Jefferies analyst Randal Konik in October.
The company has said the partnerships represent a small part of its business and are a way for it to connect with younger shoppers.
Quality problems have also cropped up. Lululemon’s Breezethrough leggings were so poorly received by customers, who said the fabric was too thin and the V-shaped seam lines were asymmetrical and unflattering, that the company stopped selling them weeks after their July 2024 introduction.
McDonald’s plan to pull Lululemon out of its domestic slump included adding more new products. He had vowed to boost new styles to 35% of the assortment by the spring, up from 23% currently.
He also hired a new creative director, whose first designs will be available in the spring.
Write to Suzanne Kapner at suzanne.kapner@wsj.com