[Editor's note: This story has been updated, including new comments from a spokesman for Chip Wilson.]
Lululemon Athletica founder Dennis “Chip” Wilson has agreed to sell 50 percent of his Lululemon shares to Boston-based private equity firm Advent International.
Mr. Wilson will get about $845 million from selling his shares, which account for about 13.85 percent of the yoga apparel company’s outstanding shares, the company says in a Aug. 7 statement. Two Advent executives will also join Lululemon’s board of directors, of which Wilson is a member.
The deal is the culmination of Wilson’s ongoing dispute with the other Lululemon board members. Wilson stepped down from his chairman position last year after his response to customer complaints about the poor durability of some of the brand's workout apparel drew widespread outrage. Wilson suggested that larger body types “just don’t actually work for” the pants and thigh-rubbing was to blame for Lululemon yoga pants’ deteriorating quality. His remarks caused a backlash,
In June, Wilson called out the board, claiming that members were "not aligned with the core values of product and innovation on which Lululemon was founded and on which the company thrived," according to CNN Money.
Since last October, the company’s shares have lost nearly half their value, although the company’s stock has climbed about 3.5 percent since the deal was announced.
Does this mean Wilson soon will no longer be part of Lululemon?
"Chip remains an active board member," writes Jim Courtovich, a spokesman for Wilson, in an e-mail. "He is not leaving the company and there are no plans for him to leave the company. In fact, having him stay on the board was a key point for the deal."
Recent confrontations between other apparel companies and their CEOs have ultimately resulted in the CEO's departure. Last year, Abercrombie & Fitch's then-CEO Mike Jeffries came under fire for comments that “cool kids” and “good-looking people” should be the only ones to wear the brand. Mr. Jeffries was fired in January. Abercrombie slashed prices in the spring to appeal to a wider audience, and started to offer third-party merchandise like Keds in the company's stores.
Shortly after Jeffries was fired, Abercrombie's stock rose 5 percent. But shares fell to $32.72 in February, and have rebounded back to $41 as of Friday.
American Apparel’s board of directors voted to fire founder Dov Charney in June, in light of the company’s poor financial performance and various sexual harassment lawsuits brought against him. Shortly after the news, American Apparel stock dipped to 50 cents before rebounding to $1.21 per share in July. As of Friday, American Apparel had fallen to about 87 cents.