Photo Credit; Getty Images
Calvin McDonald, the chief executive of Lululemon Athletica, the brand renowned for its expensive yoga leggings and sports clothing, is set to depart the company early next year. McDonald will leave his role at the end of January, concluding more than seven years at the helm. This decision follows a period of declining sales for Lululemon in the US, its primary market, and a nearly 50% drop in its share price over the past year.
However, this week the company upgraded its annual revenue forecast after better-than-expected sales in the past few months.
Mr McDonald said the decision to leave the company was taken after discussions with the board.
"As we near the end of our five-year strategy, and with our strong senior leadership team in place, we all agree that now is the time for a change," he said in a LinkedIn post.
While the Canadian company's latest results revealed a boost to its sales internationally driven by its business in China, its performance in the Americas has been going in the opposite direction.
The brand's share price on the US Nasdaq index peaked in late 2023 and has been on a downward trend since. In September, its shares fell sharply after it warned of the impact tariffs imposed by US President Donald Trump would have on its business.
Lululemon's particular concern was over the ending of the so-called de-minimis exemption, a former duty-free loophole for low-cost goods entering America from countries such as China.
Many of the Canadian company's suppliers are based in China, Vietnam and other Asian countries. In September, it estimated the newly-imposed import taxes would cost it about $240m (£178.4m) this year. However, sales in China and around the rest of the world have been positive, driving its net revenues to the start of November to $2.6bn.
"As we enter the holiday season, we are encouraged by our early performance," said Mr McDonald. However, he said that despite a good Thanksgiving period, demand had slowed since as consumers continued to look for cheaper products.
Lululemon has faced increasing competition from lower-priced rivals such as Vuori and Alo Yoga for its products.
Lululemon named its finance boss Meghan Frank and chief commercial officer André Maestrini as co-interim chief executives while it searches for a new leader.
