Elliott Investment Takes $1 Billion Stake in Struggling Lululemon, Pushes for CEO Change
Activist investor Elliott Investment Management has acquired a $1 billion position in Lululemon Athletica, marking one of the most significant retail sector interventions since the pandemic. The MOVE comes as the yoga-wear pioneer faces slowing sales growth and margin compression amid fierce competition from emerging athletic brands.
Elliott is advocating for former Ralph Lauren CFO Jane Nielsen to replace outgoing CEO Calvin McDonald, who will depart in January 2025. The hedge fund's involvement sparked a 6.5% premarket rally in Lululemon shares, though the stock remains down 45% year-to-date.
The activist campaign highlights fundamental challenges in the activewear sector. Lululemon's premium pricing strategy shows cracks as consumers trade down, while inventory management issues compound margin pressures. Elliott's playbook likely involves operational improvements and potential spin-offs of non-core assets.
