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Lululemon Athletica Inc has announced chief executive Laurent Potdevin has resigned, effective immediately, saying he fell short of the company's standards of conduct.
The Vancouver-based maker of yoga pants and other athletic-inspired clothing did not offer specifics, but said it expected all employees to "exemplify the highest level of integrity and respect for one another".
A person familiar with the situation who spoke on condition of anonymity said it was not a single event but "a range of instances" at issue, none of which involved the financial or operational aspects of the business.
Lululemon said it had begun the search for a successor.
Mr Potdevin took the top job in January 2014 at the company whose products have been aimed mainly at women.
He led the rebuilding of Lululemon's brand after a major setback — thousands of stretchy black yoga pants were recalled after customers complained they were too sheer — cost the company millions and sent the stock tumbling.
A previous chief executive, Christine Day, had left citing personal reasons, and founder Chip Wilson resigned as chairman in 2015 after suggesting that some women's bodies were not made for Lululemon's clothing.
Mr Potdevin has also resigned from the company's board.
In the interim, co-chairman Glenn Murphy has been elevated to executive chairman.
Three senior members have also taken on expanded roles and will report directly to Mr Murphy.
"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," Mr Murphy said.
"Culture is at the core of Lululemon, and 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."
Lululemon has agreed to pay Mr Potdevin $US3.35 million ($4.25 million) in cash now and $US1.65 million over a period of 18 months in monthly instalments, according to a filing with the Securities and Exchange Commission.
Analyst Neil Saunders, managing director of GlobalData Retail, called on the company to be more clear about the reasons for Mr Potdevin's departure and said failing to do so would cause speculation that would "ultimately harm the brand".
He also called Mr Potdevin's exit "a blow to Lululemon".
"During his tenure, Mr Potdevin oversaw the steady expansion of Lululemon through both calm and rough periods in the athleisure market," Mr 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."
Randal Konik, an analyst at Jefferies, noted in a report on Monday that the change could lead to "instability" at a time when the company is working toward its goal to become a $US4 billion brand by 2020 from the current level of $US2.6 billion in sales.
Lululemon shares, which had fallen 1.5 per cent during regular trading as US stocks slumped overall, dropped another 3 per cent after the announcement.
AP
Topics: business-economics-and-finance, united-states
First posted