Lululemon Shares Drop After New CEO Appointment
Lululemon shares fell 4% today following the appointment of Heidi ONeill as CEO. The move comes as the retailer faces pressure from activist investors.
LULULEMON ATHLETICA INC shares fell 4% in premarket trade Thursday after naming former NIKE INC -CL B executive Heidi O'Neill as its next CEO. The appointment follows a 38% stock decline over the last 12 months that reduced market value to $18.8 billion. Investors are signaling skepticism that a Nike veteran can resolve an intensifying proxy battle and cooling brand demand.
### Why the Nike Pedigree Failed to Impress The market reacted poorly to O'Neill's selection over Jane Nielsen, the preferred candidate of activist investor Elliott Investment Management. Elliott, which holds a $1 billion stake, pushed for a leadership change to counter rising competition from rivals like Alo and Vuori. Analysts at Needham and Evercore ISI noted that skeptics are focusing on O'Neill's recent tenure at Nike, where the direct-to-consumer business faced performance hurdles.
