Lululemon shares rise as founder turns to Goldman for shake-up
TORONTO, June 23
TORONTO, June 23 (Reuters) - Shares of Lululemon Athletica Inc rose on Monday after reports that founder Dennis "Chip" Wilson was considering options and pushing for changes at the yogawear retailer following an extended share slump.
Lululemon's typically volatile stock rose 3 percent to $41.45 but remained below its close on June 11, just before the company cut financial forecasts and warned that second-quarter sales were off to a weak start.
Wilson is building a team of advisers that will likely include Goldman Sachs, a source familiar with the situation told Reuters on Sunday. The Wall Street Journal said Wilson could launch a proxy fight or team up with a private equity firm in a buyout.
The source told Reuters that Wilson is looking at all options but has not determined his course of action, adding that Wilson's decision is unlikely for at least another couple weeks.
Vancouver-based Lululemon's reputation for selling top-quality, trendy yoga and running clothes was tarnished last year when it recalled stretchy pants because they were partially transparent.
It has been working to smooth out quality issues, battle lawsuits, deal with departing executives and soothe customers after Wilson said in an interview that "some women's bodies just actually don't work" for Lulu's pants.
Wilson, who has a 27 percent stake in Lululemon, lashed out at the retailer's board ahead of its annual meeting on June 11, saying its new chairman and another director were too focused on short-term growth.
A Lululemon spokeswoman said on Sunday that the board and management team are "relentlessly innovating to drive global expansion and create value for Lululemon shareholders." (Reporting by Allison Martell; Editing by Nick Zieminski)