The yogawear company has kept mum about the specific reasons for Laurent Potdevin's sudden exit but alludes to breaches of behavioural standards.
While the details of the matter are being kept quiet by the company, Lululemon Athletica Inc’s CEO Laurent Potdevin has been moved on over unprofessional behaviour towards his employees.
Yesterday, Potdevin resigned effective immediately, and statements following the announcement indicated inappropriate conduct is behind the 50-year-old’s exit.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another,” the Vancouver-based exercise apparel company said in a statement Monday.
“Mr. Potdevin fell short of these standards of conduct.”
It said he had failed to “exemplify the highest levels of integrity and respect for one another”, but declined to give specific examples.
Co-chairman Glenn Murphy, who will guide the company until a new CEO is appointed, added the decision was about protecting “the culture” of the company.
“While this was a difficult and considered decision, the board thanks Laurent for his work in strengthening the company and positioning it for the future,” he said.
“Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organisation.
It is the responsibility of leaders to set the right tone in our organisation.
“Protecting the organisation’s culture is one of the board’s most important duties.”
A person familiar with the situation who spoke on condition of anonymity said it was “a range of instances” rather than one particular moment of misconduct, and it had nothing to do with the financial or operational aspects of the business.
As well as Murphy adding executive duties to his position, three other senior leaders will be tasked with more responsibility during the transitional period.
Celeste Burgoyne, executive vice president of the Americas, will help manage the sales channel and brand marketing, chief operating officer Stuart Haselden will look after finances, supply chain, employees and technology, and Sun Choe, senior vice president of merchandising, will work on product development, design and innovation.
Lululemon has agreed to pay Potdevin $US3.35 million in cash now and $1.65 million over 18 months in monthly instalments, according to a separation agreement lodged with the Securities and Exchange Commission.
Potdevin did a commendable job of rebuilding the yogawear brand. He took over from Christine Day in 2014, after the long-time CEO fell on her sword over defective yoga pants that led to legal action and a mass recall.
Its reputation was shredded further when founder Chip Wilson told a reporter months after the recall that “some women’s bodies don’t work for the pants”.
Analyst Neil Saunders, managing director of GlobalData Retail, called on the company to disclose the specific reasons for Potdevin’s departure as a failure to do so would cause ongoing speculation that would “ultimately harm the brand”.
“During his tenure, Mr Potdevin oversaw the steady expansion of Lululemon through both calm and rough periods in the athleisure market,” Saunders said.
“His innovative approach and his clear sense of Lululemon’s values and essence is one of the reasons the company has enjoyed continued success, even while other sporting goods brands struggle to generate growth.”
This will certainly slow the momentum of the company as it strives to become a $US4 billion brand by 2020, from the $2.6 billion it currently stands at.