Heidi O’Neal will be appointed as Lululemon’s new CEO, effective September 8th.
Provided by: Lululemon
lululemon On Wednesday, it named Heidi O’Neal as the athleisure company’s new CEO, effective September 8.
The news comes after the company reported disappointing results for more than a year and became embroiled in a dramatic proxy battle that saw founder Chip Wilson criticize the business.
The company’s stock price fell more than 5% in after-hours trading.
Mr. O’Neal held multiple positions at Nike and was instrumental in the sportswear giant’s growth. She has also held positions at Levi Strauss, Hyatt Hotels, and Spotify.
“Heidi is an inspirational leader and proven consumer-driven brand strategist with a rare ability to imagine new futures for brands and create the structures and processes to realize that vision,” Marty Morfitt, executive chairman of Lululemon’s board of directors, said in a statement. “We chose Heidi because of her breadth of experience, her track record of success in delivering breakthrough ideas and initiatives at scale, and her ability to be a knowledgeable agent of change and growth.”
O’Neill said in a statement that he will focus on building the company’s core foundation and unlocking growth in global markets. O’Neal’s base salary will start at $1.4 million, according to the 8-K filing.
“I am humbled by this opportunity and encouraged by what the team has already built,” she said in a statement. “I look forward to joining the company and helping define and realize the next chapter of the organization’s success.”
Lululemon has struggled with weak sales, increased competition and rising costs due to tariffs. The company said in its last earnings report that it expected a loss of $380 million this year from tariffs.
Mr. Wilson, Lululemon’s largest shareholder, has also been increasing public pressure on the company to change its board of directors. He did not immediately respond to a request for comment on the appointment.
Neil Saunders, managing director at GlobalData, said in a statement that O’Neill has a “very strong background in activewear and sports” and “has a deep understanding of how the industry works.”
“There will be some investors, mostly activist investors, who will see O’Neill as a safe, traditional option,” Sanders said. “This argument is partially valid because there is a lot of cultural change needed at Lululemon to improve performance. But in our view, O’Neal is her own person coming in with an agenda for change.”
During his time at Nike, O’Neal played a key role in the company’s doomed direct-to-consumer strategy, as the brand moved away from wholesale partners in favor of its own website and stores under former CEO John Donahoe. When current CEO Elliott Hill took over as Nike’s next chief executive, he made it a top priority to eliminate the company’s direct sales plan.
Before leaving Nike, O’Neal also served as director of product and innovation at a time when the brand was lagging behind new products and facing criticism for focusing too much on the same legacy lifestyle franchises: the Dunk, Air Force One and Air Jordan. While these franchises briefly led to a surge in sales and helped Nike grow into a $50 billion-plus brand, they eventually became ubiquitous in the market and came to be considered tacky by some consumers.
Now, Hill is still working to roll back that strategy and clear inventory of those franchises from the market, which has hurt Nike’s profits and led to a decline in online sales.
