Lululemon Names Heidi O'Neill, Former Nike Executive, as New CEO Starting September 8

Lululemon announced on Wednesday the appointment of former Nike executive Heidi O'Neill as its new chief executive officer, effective September 8. O'Neill has held multiple roles at Nike. O'Neill said in a statement that she plans to focus on building off of the company's core foundation and unlock growth in global markets.

O'Neill will start with a base salary of $1.4 million, according to an 8-K filing. Lululemon expects tariffs to cost the company $380 million this year, as stated in its last earnings report. The announcement follows more than a year of disappointing performance for Lululemon, including weak sales, increased competition, and a proxy battle involving founder Chip Wilson, the company's largest shareholder.

Shares of Lululemon sank more than 5% in extended trading after the announcement, according to CNBC reporting. " "There will be some, mostly activist investors, who see O'Neill as something of a safe and traditional choice," Saunders said. "This argument is partly valid as a lot of cultural change is needed at Lululemon in order to improve performance.

" While at Nike, O'Neill played a key role in the company's direct-to-consumer sales strategy, where the brand pivoted away from wholesale partners in favor of its own website and stores under the former CEO. When the current CEO took over, he made it a priority to walk back the direct-selling plan.

Prior to leaving Nike, O'Neill also oversaw product and innovation at a time when the brand faced criticism for falling behind on new products and focusing too heavily on the same legacy lifestyle franchises.

Wilson has also been placing increased public pressure on the company to make changes to its board of directors. He did not immediately respond to a request to comment on the appointment.