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(Sharecast News) - Activist Elliott Investment Management has reportedly built a stake of over $1bn in Lululemon Athletica and is bringing a potential CEO candidate to the athletic apparel retailer it wants to help turn around.
According to the Wall Street Journal, citing people familiar with the matter, Elliott has been working closely with veteran retail executive Jane Nielsen, a former chief financial officer and chief operating officer at Ralph Lauren, who they see as a potential Lululemon CEO candidate.
The stake makes Elliott among the biggest investors in Lululemon, which has a market value of around $25bn.
Last week, Lululemon announced that chief executive Calvin McDonald was stepping down in January and that the business faces pressure to reverse many missteps from quality issues to "losing its cool".
The activist's arrival, and CEO candidate, comes as Lululemon founder Chip Wilson had already been agitating for change and weighing in on the CEO search.
Before McDonald's departure was announced, Wilson had been attacking Lululemon publicly for killing innovation and losing what made the brand "cool" in the first place.
McDonald took the helm of Lululemon in 2018 and steered the business through the pandemic, tripling its annual sales during his tenure to $10.6bn. He is expected to give up his board seat but remain a senior adviser through March to facilitate a smooth transition.
WSJ sources said that in Nielsen, Elliott sees a retail pro that can help revitalise the Lululemon brand. Elliott and Nielsen have been working together on evaluating this opportunity for months, sources said.
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