The Decibel - Luluemon’s fight to stay on top of athleisure

Episode Date: August 12, 2026

For years, the Canadian athletic-wear brand Lululemon both pioneered and dominated the athleisure retail market. It turned workout gear into a status symbol, growing its international operations to 30 countries. But there’s trouble – a public battle with its founder, controversies over its marketing and a cratering stock price have all amounted to serious problems for the once-stalwart brand. Susan Krashinsky Robertson, The Globe’s retailing reporter, dives into the issues Lululemon faces, crunches the numbers of its financial outlook and asks what happens when a big brand loses its cool. Questions? Comments? Ideas? Email us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

When Lulu Lemon first came onto the scene in 1998, people fell in love with their gear. The brand, founded in Canada, was seen as functional, fashionable, and a status symbol. And I, too, felt the pull. I had these prized pants that I saved all my money up for. I remember walking into the store and buying these black, flared pants with the green and blue top of near the waistline and just wearing those and feeling like just so cool. I made it. I made it.

In like, yeah, in late elementary early high school, like having that Lulu Lemon logo on your waistband, you made it. That's the Globe's retailing reporter, Susan Krasinski Robertson. You know, there were jokes about sort of in the early days of that brand, particularly in Vancouver where Lulu Lemon was founded, of just like armies of Lulu Lemon women, decked head to toe in the brand, you know, walking down the sidewalk. It was very much a thing that was like an if you know you know kind of thing.

If you're on top of the trends, this is what you were wearing. And it was the early days of what we now think of as totally normal, but was not normal at the time. Basically, people wearing the stuff they wore into the gym out to the cafe or out for social events during the day, kind of casual social things. What we now know as athleisure is the term that's used in retail. The idea of women taking what they wore to the gym and wanting to be seen in it, was something that Lulu Lemon really, really helped to pioneer. Lulu was the brand.

And while today they're still making $11 billion U.S. dollars in annual sales, things aren't what they used to be. Well, Lulu Lemon is actually quite a healthy company in a lot of ways. But, you know, in fashion, one of the things that can be really dangerous for a brand is when a narrative sort of starts to spiral out of control. And that is what Lou Lemon is trying to prevent. right now. So what's at stake is Lulu Lemon has lost some of its shine in the last few years. It's lost a little bit of the image of being the trend setter in the area of sort of

athlete, casual clothing, sportswear-influenced clothing. And they have to sort of stop that train before it runs out of control. Susan has been reporting on the company and some of the troubles they've been dealing with. From the brand losing its cool factor to rising competition. petition to an internal proxy fight. Today, she's on the show to discuss what this all means for the future of Lulu Lemon. I'm Cheryl Sutherland, and this is The Deciple from the Globe and Mail. Hi, Susan, welcome back to The Decibel. Thanks for having me. So I want to start at the beginning of the story when Lulu Lemon first came onto the scene in 1998. What did that look like? Like, what was Loule Lemon's role in the world of retail? Yeah, so Lululemon's founder, Chip Wilson, he took his first yoga class

in 1997 and he discovered a discipline that he really loved that he had a lot of respect for. And he saw this opportunity to create a category of clothing that was basically, you know, you might go to the gym, you might go to yoga class, and you might also want to look cute. You might want to be able to wear that outfit for coffee with your friends after class. And so he went about creating Lulu Lemon, which is a brand that really created an entire category or helped to create an entire category in retail and in fashion. And can you give me a sense of how Lulu Lemon was perceived? How are people talking about Lulu Lemon?

Lulu Lemon for many years really was that girl. Like, Lou Loulemon really set the trends in this space. People wore this brand. They were very proud of wearing this brand. And, you know, I spoke with some executives who were with Lulu Lemon and some of those early days, one of them told me a story of two women literally pulling on the same hanger. In the store. I had it first. No, I had it first in the store. And literally that was just how hot this brand was and was sort of a symbol of everything that was going right at the time. People felt

they had to have these clothes. And so that really was where Lululemon started. They set the trends. They created this category. And they really were that status symbol. Yeah. And so this company initially started in Vancouver, right? It's not just a Canadian company anymore. But it's really interesting to think about how it had kind of these scrappy beginnings and then became this huge company. What was it about this brand and their products that attracted so many people? Like, was it the quality? Like, tell me more about that. The quality was a big part of it. Yeah. And as I say, when I spoke to some of those former executives, they talked to me about just sort of a relentless focus on product quality at the time. They had weekly feedback sessions with athletes

such as yoga instructors or runners, constantly asking for feedback on the products as they were being developed. And the way that it was marketed was quite similar. You know, in its early days, they really relied on community leaders. What we now think of as influencers, they would go into yoga studios in a neighborhood,

say we're opening up a store and we want you to be our ambassador because we know you have a following and people will trust what you put on. And so they got very involved in the communities They would host yoga classes in the stores in the early days. I remember those, yeah. Yeah, really pioneered that.

And that's a thing that other brands have borrowed ever since then. So, again, when we talk about Lulu Lemon sort of pioneering certain things, we're not only talking about the category in which they played, but also the way that they built that brand that many other brands now use as they're getting started. You spoke a little bit about Chip Wilson, who was the CEO and founder of the brand. But tell me a little bit more about him because I think people will remember his name, and he's kind of a controversial character. So tell me a bit about Chip.

He's a character for sure and really looms large in Lou Lehmins' history. As I say, he was the founder. He was really the visionary who built this brand. And a lot of credit goes to him for what he built there. He has also over the years been a controversial figure. I think probably the most memorable example of that was back in 2013 when Loulemon had a crisis because some leggings, some pants that had made were criticized for being see-through. and Chip went on Bloomberg and did an interview about this

and basically suggested that the problem wasn't actually the leggings, it was that some people's bodies weren't suited to the leggings, essentially blaming customers for being too large. And it didn't go over well at all. It was a huge PR crisis for the brand. And he actually departed shortly after that happened. He hasn't for many years been involved directly in Lou Lemon. He's not on its board of directors,

and he hasn't been its CEO for many years. but he does remain its largest individual shareholder and someone whose personal wealth is quite tied up in the value of the company. And also it's his baby. It's the thing that he built. And so he obviously has thoughts on it. And so Chip has loomed large in the more recent struggles Lou Lemon has had as it's fallen on harder times because he's been very, very vocal about what he thinks has been going wrong. Yeah. And we'll get into what's going on and Chip's kind of influence on that in a bit. But before we do, let's kind of linger on this see-through pants debacle. Would you say, is this kind of the time when we started to see the shine fading away from Lul-Lemmon and kind of this brand that was really revered by everybody?

No, actually, I wouldn't say it was then. That was very much a PR crisis. And we shouldn't understate that. You know, it was a big problem. But 2013, the brand was still extremely hot. And it was about to have a whole lot more growth. I mean, Lululemon was really firing on all cylinders at the time. So I think what people say is when we started to see glimmers of maybe issues was around 2018.

Again, according to some of the former executives I've talked to who've sort of been watching the brand from the outside as well as from the inside, have talked about, you know, a little bit of a shift that started to happen according to them. You know, there was a time early in the brand's life where designers were really at the front of everything Lulu Lemon did and were really empowered to make product. decisions. And some of the people I've spoken to have suggested that a little bit of that started to shift around that time that, you know, maybe they were shifting a bit more to defensive mode, trying to protect their dominance in the market as opposed to really leading. So some merchandising people got a little more involved in those product decisions. And essentially what that means is they got a little more safe. And that didn't really cause problems for many years. You know, one of the things that happened was also in 2018, they had a new CEO come on board,

Calvin McDonald, who led Lou Lemon through this just crazy period of growth. He did a lot of work to expand the brand's presence with men's products. He also led huge expansion into international markets, particularly China. So really spearheaded that. It really wasn't until 2024 that we started to hear signs that there was actually trouble on the horizon. Interesting. Okay, so let's talk about some of the more recent troubles facing the company. When did we start seeing other missteps from Lululemon? Yeah, so obviously I talked about McDonald leading a huge period of growth, but there were also serious missteps under his leadership. The first big one was the acquisition of mirror, which was this device meant to stream fitness classes into people's homes, and it was a mirror so you could

kind of compare your form. Lou Llemon paid $500 million for that in 2020, and within a couple of years it was written off almost entirely. That was an unmanned. mitigated failure. The other thing that started to go wrong, as I mentioned, was in 2024. That was a much bigger problem. The mirror acquisition was a failure and that's unfortunate, but it doesn't fundamentally change Lulu Lemon's business. What Lulu Lemon's business really is is in selling clothing that people think is worth paying for. And so the danger signs around that really started in 2024. So it's chief product officer, Sun Cho. She left the company in that spring. And in that summer, McDonald's acknowledged for the first time what he called reduced newness,

which is sort of a jargony executive way of saying our fashions aren't that hot anymore. Basically, you know, we haven't got enough new exciting stuff on the shelves to bring people in. And customers did indeed start voting with their feet. And this gave an opening to some of those competitors I talked about who have really streamed into this industry way before 2024, you know. And it's really since then that there's been this trouble brewing. Some of it exacerbated by a very public fight with Chip. And so, you know, fast forward to late 2025. And, you know, they've been working on trying to fix this problem with newness.

They've been working to try to develop new products that will win people back. But in October, Wilson took out a full-page ad in the Wall Street Journal. And it was basically a public tongue lashing. of all of the executives at Lulu Lemon, who are now running the company. He compared the decline of Lulu Lemon to a plane crash. That's a quote. And he said that the brand was at risk of another direct quote, a slow death. And he also decried what he called finance-focused leaders who were not experts in product or design.

So it was basically this huge shot across the bow from the founder of the brand saying, you're doing it wrong. What was his goal? Do we know what he was trying to do there? We do know what his goal was because he eventually launched a proxy battle to overhaul the board of directors of Lulu Lemon, suggested his own appointees and basically said, we need entirely new leadership here. By December, there had been increasing pressure. Calvin McDonald, the CEO, had to depart. And amid all of this, Wilson launched this proxy battle and said, I can't trust. we can't trust as investors, this board of directors to pick a new leader. And he suggested who he

wanted on the board and started pushing for that. At the same time, shortly after McDonald's departure, it was revealed that one of the world's largest activist funds, which is called Elliott Investment Management, they'd taken a more than US $1 billion stake in Lul Lemon. And usually when these activist funds come on the scene, it's because they're about to start pushing for leadership change as well. Yeah, I was going to say, what is an activist fund? Like, how do they work? They're often part of hedge funds. And what they do is they take a very large ownership stake.

They buy a lot of stock in a company. And when you become a large shareholder in a company, you start to have more of a voice. And so these funds will come in when they see a company struggling and they believe that it's not got the right sort of path for the future. They will come in and they'll push for change. And that's sort of their MO. So when an activist fund comes on board, you know it's about to be something where they're going to start pushing for possibly a new leader. you know, possibly a major change in strategy, something that they believe will turn things around. And Elliott themselves previously got involved with PepsiCo and, you know, forced some change

at PepsiCo. So this is a well-known activist fund, well-known folks. And when they come on board, you know that there's going to be a lot of pressure to make some changes. It might be a little bit obvious, but I think it's worth kind of just really spelling it out. Like, why is it concerning that Lou Lemon is having all of these internal fights? Well, part of what says, set off these fights is the decline in the stock price. So we've already talked about the strategic challenges that they're facing. And we know that since 2024, these have been made very public. And it's basically the subject of every conference call when they release their quarterly earnings. And investors have really reacted. So Lou Lemon for many years was a really hot growth

stock. And a lot of investors really piled into it. And it had incredible growth in the stock price for many years. It hit a high of U.S. $511 a share, but since then, it's really tumbled. For most of the last month, by comparison, it's been trading below $120 a share. So far this year, it's lost about 45% of its value. That's a huge decline for a stock. And that's after all this fighting that started late last year. And over the past year in total, it's lost more than half of its value. So there's just been a huge decline. And when you get that big a tumble in the stock price, that's real money for investors. They've just watched their own net worth on paper decline significantly. And investors basically are reacting to what's happened there. So whenever you get a stock performing

like this and declining this much, you're going to have pressure on leadership to turn things around. What's going on with this fight now? Has it been resolved? So some of it has been resolved. So, you know, In late May, Lou Lemon announced that in exchange for Chip dropping his attacks, it would accept two of his three nominees to the board of directors. So a co-CEO of that trendy running shoe company on is one of them. And another one is a former chief marketing officer at ESPN. And so that has settled things down with Chip Wilson.

But I think it's no stretch to say that the pressure from investors continues as long as the stock performance continues to be what it is. We'll be right back. Let's talk about the North American market and how that was also a concern, right? Because what was happening in that market when it came to sales for Lulu Lemon? Yeah, that's really where the trouble has started. And that's important because North America, even though Lulu Lemon now has operations in more than 30 countries, and Calvin McDonald really helped to spearhead this international expansion, the international market is very important for Lulu Lemon now.

North America remains where its core customers are. it remains also where some of those trends are set. And if you lose your customers in your biggest market and your home market, it's not long before the shine comes off the brand in other places. And so the problems it's having in North America are significant. And so that's where it's really started to lose some customers. Its sales have dipped. Some of that is starting to bleed over into China as well.

They're still growing in those international markets. But North America is where those problems are happening. And some of what led to this was, you know, bad PR, frankly. A very loud fight with the founder of your brand can't help but raise eyebrows and create some questions in customer's minds about whether he has a point. There was also a lot of negative commentary around Lulu Lemon back in April. They were temporarily forced to pull a line of leggings for a very familiar problem, actually, complaints that they were see-through. And then they said that there were some products in the first three months of this year that were the performance was a bit mixed. So they're still having a bit of a rocky time trying to win back the brand perception.

So all of this has forced them to basically revise what they expect for the year ahead. And it's not good. Let's talk about the numbers to kind of like ground us and understand like where Lululemon sits right now. Because it does sound like they're juggling many different problems or issues over the past few years and into today as well. How has this all affected Lou Lemon's financial health? What are the numbers? Well, the financial health of the business is actually surprisingly good. You know, it's funny. When you cover a story like this, the people in your life always come to you and ask questions, particularly when you cover retail. These are brands everybody knows and intersects with every day. And one of the questions I got over the last six months was, is Lou Lemon going bankrupt?

And I had to sort of say, like, no, little lemon's fine, actually. It's important to note that. This is a huge company. They report their earnings in U.S. dollars. They did U.S. $11 billion in sales last year. That's very big. That's a very big brand. They have high cash flow. They have no bank debt. That's something that can really sink companies.

So they retain this significant, if no longer singular, presence in the Athleisure market. The bigger problem is nipping these things in the bud when they start. So financially, they're not on the money. the brink of bankruptcy. But the retail landscape and particularly the fashion landscape is littered with brands that were once huge and either don't exist anymore or have fallen on much harder times. And so it is absolutely possible for giants to be slayed. Alternatively, if they invest right, if they can turn around some of this perception, they're probably never going to be the dominant player that they once were, the singular presence setting all of the trends in the same.

space because the athleisure market has just changed so utterly, they can probably turn it around to the extent that they're just fine, actually, and maybe even modestly growing. And that's, I think, where all of their focus is going right now. Just for context, can you give us a sense of, like, where that $11 million stands from previous years? Like, is it growing? No, it's huge. Their revenue is more than tripled in just the last six years. So this is a brand that has been growing significantly. Now, a lot of that has come from that international expansion. But regardless, I mean, this is a brand that has made huge strides and is not the company that it used to be. It's also not the company that it was under Chip Wilson's leadership.

It's a much, much bigger brand now. And something you mentioned there, which I think is really interesting, is this like they're losing their cool. And, you know, if you look at a company that's making $11 billion, you're like, well, what does it matter if it's cool? But there is an issue here because there are other brands that are now on the scene, right? Who are some of these new brands that have been popping up? And what are some of the new brands doing that is attracting some of the audience away from Lou Lemon? Yeah, you know, what the other brands are doing is as varied as the brands that exist now. Allo Yoga, Form, Gym Shark, Sweaty, Beyond Yoga, Left on Friday, which is actually a swimwear brand that was started by former Lou Lemon staffers, but has now, lo and behold, extended into active wear because it's such a lucrative market.

And then there are also really tiny upstarts. They're all doing different things to win away Lululemon customers. And also don't forget about the many, many sort of almost no-name brands out there that are dupes on Amazon that people almost take pride in finding. You know, there's a lot of competitors out there. So there are these dupes. And what are they doing differently? Well, they're giving it to you cheaper. Allo Yoga.

What are they doing differently? They're definitely not giving it to you cheaper. That's a much more premium brand. Even if not everyone who shops at Lululemon can afford to jump to aloe yoga. Allo Yoga is symbolically important because they're stealing away some of that shine of like the premium brand, the trend setter. And some of them have also attracted investment from other major companies. And then on top of that, you can't discount these small upstarts. They're like a fly on the back of the giant beast that is Lulu Lemon.

They're tiny in comparison. But there are startup companies that are also winning away customers in these very niche ways. There are Canadian ones, too, that I spoke with. brands like 437 or as you're fit that are very much the if you know you know brands that some of the cool girls you're spotting these clothes on them if you're going to spin class or if you're going to yoga class and they're building up a little bit of brand love by doing some of that grassroots marketing that Lulu Lemon was once really, really good at. We would never say that they're big enough to pose a massive threat to Lulu Lemon, but they're all part of this sort of constellation of

companies that are out there sort of wooing away customers a little bit at a time. And that's created an environment where Lulu Lemon just can't be that dominant player anymore. They probably never will be, even if they fix some of these problems that are in front of them. So with all this new competition, what is Lulu Lemon planning to do going forward? Like, how are they planning on navigating these troubled waters? So some of that work has already started. One of the big things, actually, is that Lulu Lemon announced it's hired a new CEO. So that's former Nike executive Heidi O'Neill, She's going to be starting in September. But in the meantime, the people who are leading Lulu Lemon right now, it's being led by two interim co-CEOs who are veterans with Lulu Lemon.

So one of the things they are doing is they're working to reduce their product development timelines and have already done that, actually. So before this work started, it took about 18 to 24 months from start of design to thing getting on shelf for a product to come to stores. Now it takes about 15 to 16 months, and the executives have said they're working to cut that down to 12 to 14 months. And the reason why that's important is because when you're talking about fashion and you're talking about trying to chase trends, having a more compressed timeline where you can see something is starting to get hot and you can make those products to meet that demand, that's really important. The other thing that they're working on obviously is just focusing more on design to try to win back people with just better stuff, more interesting stuff. that people want to buy. Yes, they've said that they're focusing on quality. I think the leadership that Lulu Lemon would say their quality has never gone away. The other thing that they're doing is spending more on marketing, something that they haven't had to do for a number of years,

or at least not as actively as they're going to have to do it now to try to turn things around in terms of perception. So they've also said that they plan to increase their spending on marketing by about 10 to 15 percent this year compared to what they spent last year. So they're really sort of attacking this from a messaging standpoint, as well as from a strategic standpoint. And then finally, they've paired back some of the things they sold. They're trying to really sort of refine what it is that they sell. And then lastly, they're also working on the experience in their stores. So even just the way product is merchandised in Lululemon stores, if you walk into a Lululemon

today, you might notice that there are actually fewer things on display than there were just a few months ago because they're working on sort of cutting that back to make the stores feel a little bit more premium again, make the shopping experience feel more premium. And if the store is too cluttered and there's too. too many options and too many things to kind of sift through that shopping experience isn't quite as good. So that's another thing that they're working on. So lots of moving pieces right now. And then it remains to be seen, of course, what the new CEO will do once she's in the chair and has had time to think about what's really ailing the Lula Lemon and what it needs to do

for the future. Okay. Susan, thank you so much. Thanks for having me. That was Susan Krasinski Robertson, the Globe's Retailing Reporter. That's it for today. I'm Cheryl Sutherland. Our former intern and associate producer, Cynthia Jimenez, produced this episode. Our producers are Madeline White, Rachel Levy McLaughlin and Mahal Stein. Our editor is David Crosby. Adrian Chung is our senior producer, and Angela Pachenza is our executive editor.

Thanks so much for listening.