彭博发布露露乐蒙新任CEO与竞争压力长文特写，未披露新的公司级交易催化

Over the past 28 years, Lululemon Athletica Inc. has sold dozens of kinds of leggings. Its Equanimity pants allowed downward-doggers to “embrace your asana.” Its High Times pants were meant to take wearers from hatha to happy hour. Its Clarity pants were engineered to “get that hiney to kundalini class,” as the company boasted on its website. Then there are its bestselling Align pants, which for more than a decade have hugged millions of women’s quads and calves, whether they were doing Pilates or SoulCycle, making a grocery run, queuing up for a latte or meeting on Zoom. Lululemon leggings not only turned into the prevailing uniform of the modern-day American woman but also became for the company what iPhones are to Apple.

So in January, when the company unveiled its Get Low line, customers had no reason to doubt that a $108 investment in the leggings would allow them to “experience what uninhibited movement feels like,” as Lululemon wrote on its website. But Get Low, it turned out, wasn’t squat-proof. “Oh, my God, guys, I can’t believe I’m showing you this!” gasped a TikToker named Lauri, sharing a rear view of herself in the mirror with her phone. “I bent over, and they were completely see-through!”

Lululemon paused sales of the collection online. Then it ignited another onslaught of social media outrage by restoring the legging, with the caveat that customers should probably choose a larger size and maybe slip on skin-toned undies first. “Imagine selling something FULL PRICE that’s clearly defective and trying to gaslight your client base by telling them to wear seamless skin-toned underwear,” fumed one of many commenters on Reddit.

This wasn’t the first time the Vancouver-based company had a sheer-leggings problem and fumbled the recovery. In 2013 it endured one of its most embarrassing and costly setbacks when it had to remove almost one-fifth of its women’s bottoms from store shelves because they were similarly diaphanous, only for its founder and then-chairman, Chip Wilson, to tell the press that the leggings weren’t the problem; its customers were. “They don’t work for some women’s bodies,” he told Bloomberg Television at the time. He tried to walk back the remark, but the damage had been done.

Now more than a decade later, Wilson was officially gone from the company, but Lululemon still couldn’t get out of its own way. In 2024, two years before the Get Low disaster, the company halted sales of its Breezethrough line, designed for hot yoga, after wearers griped that its design created a less than flattering “whale-tail” effect on their backsides, as if they were wearing a thong or a G-string. By then, Lululemon was reporting quarterly revenue slumps in the US, its largest market, and its shares, following an end-of-the-year rally, would experience a precipitous descent.

For decades even an occasional pratfall couldn’t impede Lululemon’s reign. It enjoyed yearly double-digit revenue growth and increased its store count. Its shares caught fire under former Chief Executive Officer Calvin McDonald, who took charge in 2018 and led the company through a period of pandemic-fueled hypergrowth. Then it seemed as if everything that could go wrong did. It made a rash of unforced errors just as a swarm of competitors rushed in.

By the end of last year, Lululemon announced that McDonald would be departing as it was trying to ward off a loud proxy campaign being waged by none other than Wilson, its disputatious billionaire founder and, owning nearly 9% of the stock, its largest individual shareholder. In the decade since his departure from the company, he hadn’t lost the ability to attract attention to it, however noxious his methods could be. Wilson wrote a book published in 2018 titled Little Black Stretchy Pants, in which he aired his grievances about being forced out of the company and accused its various leaders of subsequently presiding over “five years of missed opportunity.” In early 2024 he made headlines by complaining to Forbes that the men in Lululemon’s ads looked “sickly” and that the women were “not inspirational,” and he also blasted the company’s diversity and inclusion initiatives. More recently, Wilson lambasted Lululemon’s management in a full-page Wall Street Journal ad: “Like a plane crash, decline rarely happens because of a single failure, it’s a series of mistakes.”

“I don’t know that Chip can get along with any CEO of his baby. It’s just who he is”

Lululemon responded that Wilson’s ideas were out-of-date, that his actions had been damaging to its brand, and that he had conflicts of interest. Among other things, Wilson has more than a 17% stake in Amer Sports Inc., the Finnish company that owns Arc’teryx, another Canadian activewear apparel company. But nothing seemed to deter Lululemon’s founder. And he wasn’t the only major investor pressuring the company. Elliott Investment Management, the activist hedge fund, had amassed a more than $1 billion stake in Lululemon, and its preferred candidate for the top job was a former chief financial officer of Ralph Lauren Corp.

Instead, Lululemon announced in April that it had selected Heidi O’Neill, a former top executive at Nike Inc., to be its next CEO. “She has this very unique ability to imagine a future that doesn’t exist and then the ability to create the processes and the discipline to actually ensure that it comes true,” Marti Morfitt, chair of Lululemon’s board, told Bloomberg Businessweek in June. Even so, Lululemon shares swooned on the news of the hiring. O’Neill may have been at Nike for a quarter of a century, but she’d also helped preside over a period when shares plummeted and the company lost its cachet with sneaker fans. She seemed an odd choice for an apparel company in need of a turnaround, and it will be a while before she can prove her naysayers wrong. O’Neill won’t take the helm of Lululemon until September, when her noncompete agreement with Nike expires. (O’Neill declined to comment to Businessweek.)

Once she does, however, she’ll have more to worry about than winning over shareholders and her new employees. In May, Wilson and Lululemon agreed to a ceasefire of sorts: The founder would stop his virulent attacks for all of 18 months. But as part of the agreement, he’s been able to choose new board members and will get regular sit-downs with O’Neill as she’s trying to decide where to steer the company. In other words, after more than a decade on the outside, Wilson has regained a foothold at Lululemon.

For years, Wilson’s preferred way of taking meetings resembled a hazing ritual. He expected those who wished to meet with him, whether journalists, professors or private equity investors, to chat while ascending the Grouse Grind, a trail near Vancouver so steep that it’s known as “Mother Nature’s Stairmaster.” If they had any breath left to speak.

This was the sort of thing he got away with after he established himself as the athleisure king. It began in 1998 when Wilson, then 42, showed up at a yoga class in Vancouver in the hopes it would help him with his aching back. He was prescient enough to realize he was witnessing the dawn of a North American yoga boom. All that was missing were the proper outfits for women who occupied the majority of the mats. “The classic late-’90s attire would have been like a long-legged electric-blue spandex onesie,” says Rebecca Sebastian, editor of Inside Yoga, a trade publication. “It wasn’t something you’d go to the grocery store in.”

That changed after Wilson, who previously designed snowboarding apparel, came up with a pair of yoga pants using a blend of nylon and Lycra. He started selling them in a neighborhood store, enlisting local instructors to be his ambassadors by giving them outfits. “If I was wearing Lululemon, people were like, ‘Where can I get that?’” recalls Fiona Stang, Wilson’s original yoga teacher and one of his first emissaries. As Lululemon expanded in Canada, it attracted A-list shoppers from south of the border. Former employees remember spotting celebrities including Jennifer Connelly, Courteney Cox and her former-husband, David Arquette, and even Icelandic chanteuse Björk wandering the aisles in search of getups that would be comfortable and flattering as they performed their warrior poses.

Lululemon also attracted an army of employees fiercely devoted to the company and its founder. Wilson paid for his staff to take Landmark Forum, a three-day motivational course sometimes described as a cult, based on the teachings of EST founder Werner Erhard, where, former employees say, they were encouraged to publicly process their traumas. Lululemonites were expected to publicly post their personal goals in the office and read books, including Ayn Rand’s Atlas Shrugged, a favorite of the founder, who has described himself as “right of Attila the Hun economically, left of Greenpeace environmentally.” That so many stuck around speaks to Wilson’s charisma and helps explain Lululemon’s early success. “People are just drawn to him,” says Darrell Kopke, a former Lululemon general manager. “He has the rizz, as the kids say.”

It didn’t seem to matter that Wilson could also be a churl. He poked fun at child labor in the apparel industry, appearing in an early ad at a sewing machine sucking a pacifier and wearing a baby bonnet along with several of his employees. He told a Canadian magazine in 2004 that he’d come up with the name Lululemon because the “L” sound doesn’t exist in Japanese and “it’s funny to watch them try and say it.” (He later denied making the comment.) But the company was still small and private, with only 14 company-owned stores and about $41 million in revenue.

Those days would soon be over. In 2007, Lululemon held an initial public offering that raised more than $327 million. Wilson, the largest shareholder, with 38% of the stock, was now a wealthy man. He remained chairman and chief product designer, but he’d relinquished his CEO title, believing Lululemon would be better off in the hands of managers habituated to Wall Street’s ways.

One of those newcomers was Christine Day, a former senior executive at Starbucks Corp. who became Lululemon’s CEO the following year. Former executives speak highly of Day, saying she tried to preserve the company’s idiosyncratic culture, which included attending the Landmark Forum herself. Perhaps as important, she took advantage of the recession to negotiate more favorable store leases and started Lululemon’s e-commerce business, something the founder was hesitant to pursue. Even so, there were tensions between Day and Lululemon’s headstrong founder. “I don’t know that Chip can get along with any CEO of his baby,” Kopke says. “It’s just who he is.”

But even as Lululemon grew, it still operated in some ways like a family business. The founder sat on the design floor with his second wife, Summer, who also toiled in the department. Wilson’s eldest son, JJ, worked in the men’s design department.

Nor was Wilson shy about undercutting Day. The two clashed over the cancellation of a seasonal color line that cost the company $6 million. Wilson shrugged off the expense; Day was appalled by the price, according to the person familiar with the contretemps who asked not to be named discussing confidential matters. The founder suggested curious slogans to adorn Lululemon’s bags, such as one arguing that moderate amounts of dog pee could be beneficial to one’s lawn. The slogan, which Day found objectionable, never made it onto a bag. But that didn’t stop Wilson from working with a creative director behind Day’s back to produce another with the opening line from Atlas Shrugged, “Who is John Galt?” the person says. The Randian bag was widely mocked. (Wilson later wrote in his book that Day “loved” the idea.)

Finally, in December 2011, Day evicted Wilson from the design area, relocating him to the executive floor, a decision, she says, that made him irate. “Chip cornered me in his office after-hours and was so aggressive and threatening that I was not even sure I would make it out,” Day recalls. She says she refused to come back to the office until he was banned from the building. (Wilson offers a different account in his book, saying he initially accepted his relocation as “the next best step” but later regretted it.)

Wilson left for a sabbatical with his family in Australia. The following month, Lululemon announced he was stepping down as chief innovation and branding officer, though he remained chairman. (Day says that Wilson “verbally assaulted” her when she encountered him last year in the parking lot of the Arbutus Club in Vancouver, and that she’s subsequently moved out of the city because she feared for her safety. A spokesperson for Wilson disputes Day’s characterizations of the founder’s altercations with her. “Chip Wilson has worked alongside powerful female leaders with the goal of empowering women his entire career,” the spokesperson says. “The comments by Ms. Day are baseless.”

Wilson might have remained in that role had Lululemon not experienced its first see-through-pants crisis, in March 2013, resulting in a revenue hit of as much as $45 million. Day says Wilson urged her to blame customers, not the pants, for the problem. She refused. So Wilson said it himself that November on television. His body-shaming remarks left many viewers aghast, including fellow Lululemon executives and Wall Street types.

“I’m sad. I’m really sad,” Wilson said in an apology to his staffers in a YouTube video at the time. “I’m sad for the people of Lululemon who I care so much about that have really had to face the brunt of my actions.” He neglected to make amends with customers he might have insulted, though. “You hear that, ladies?” quipped Stephen Colbert, former host of Comedy Central’s The Colbert Report. “Chip Wilson is sad that your chafing ham hocks made him put his employees through this difficult time.”

In December 2013, Lululemon said Wilson was resigning as chairman, but he wasn’t the type to exit quietly. He became a gadfly, complaining publicly about how its shares were underperforming those of Nike and Under Armour Inc. He financed Kit + Ace, an apparel maker run by Summer and his son JJ that he predicted would become a $1 billion company. Landmark, of course, was free for its employees. Even so, the Wilsons ended up shuttering most of Kit + Ace’s stores and selling the company to an employee-led group.

Meanwhile, back at Lululemon, the search was on for someone to replace Day, who’d announced that she, too, would depart once the company found her successor. One candidate was Jerry Stritzke, a former president of Coach. But Stritzke, who later became CEO of REI, took himself out of the running after attending the Landmark Forum at Lululemon’s behest.

Instead, Lululemon said in late 2013 that it had hired Laurent Potdevin, the gregarious former president of Toms Shoes, the socially conscious shoe company. Swiss-born Potdevin meditated twice daily and became convinced that Lululemon’s culture was “a hurdle to continued development,” as he put it in an appearance at the Fashion Tech Forum in 2016. Former executives say he removed a slogan from the lobby that had been one of Wilson’s mantras — “Elevating the world from mediocrity to greatness” — and did away with encouraging employees to take Landmark.

Executives from the Wilson era departed, including some who’d played crucial roles in Lululemon’s rise. In the meantime, Potdevin tried to freshen up its inventory by introducing a line of “Naked Sensation” bras, crops and tights. It was a cheeky move for a company that had only recently recovered from a pants recall. But in February 2018, Lululemon said Potdevin was resigning, having fallen short of its standards of conduct. Bloomberg News reported that he’d had an inappropriate relationship with a designer, which former employees say was an open secret. (Potdevin didn’t respond to requests for comment.)

Once again, Lululemon didn’t have an immediate successor lined up. But five months later it announced it was hiring McDonald, a former Sephora executive. “Being the CEO of Lululemon is my dream job,” he said on his first earnings call, in August 2018. Compared with his predecessor, employees joked, Lululemon’s new leader was like the boyfriend you’d take home to meet your parents.

Lululemon has always been a place where employees took pride in staying in shape, and McDonald fit right in. He told the New York Times that he awoke daily around 6:30 to squeeze in the first of two daily exercise bouts. Sometimes he ran while his kids cycled along with him. Other times he’d take an early morning swim. It helped prepare him for Ironman competitions. His routines probably also girded him for one of his early tasks as Lululemon’s CEO: winning over the founder.

By then, Wilson was promoting Little Black Stretchy Pants. Yet he was a McDonald booster. “What is exciting about Calvin is that he is an athlete, and this could be a great start of a new era,” Wilson wrote in his book. The founder and the new CEO took regular walks together and seemed to get along.

McDonald took advantage and put his own stamp on Lululemon, unveiling a plan in 2019 to double its e-commerce revenue, which had reached $859 million in the previous fiscal year, by 2023. Little did McDonald know that Lululemon’s sales would shortly be supercharged by the pandemic: People stuck at home no longer craved suits or even business casual. What better way to be attired while puttering around behind closed doors, baking sourdough or binge-watching Tiger King?

If gyms were shuttered, McDonald figured there was yet another opportunity beyond leggings, overseeing Lululemon’s 2020 acquisition of Mirror, a virtual fitness company, for $500 million. Mirror’s signature product was its large interactive screen that sold for $1,495 and served as a portal for virtual personal training sessions and prerecorded exercise classes. Along with the hardware, the $39 monthly subscription payments for the fitness content would bring in a steady stream of revenue.

By 2021, Lululemon had blown past McDonald’s e-commerce target three years ahead of schedule. So the following year he set out to double the company’s total revenue by January 2027, to $12.5 billion. Around the same time, Lululemon’s Everywhere belt bag, a $38 fanny pack, became a viral sensation. The bag was designed for store employees so they’d have somewhere to stash their phone, wallet and product scanner, but shoppers noticed them and demanded them too. Suddenly, Lululemon had an affordable breakout product that kept people flowing into its stores, where they might discover pricier merch — the Snow Warrior Parka, perhaps, or, in the men’s section, its ABC pants (short for what the company describes as its “anti-ball-crushing technology”).

McDonald seemed to revel in Lululemon’s success, attracting more than 10,000 followers on Instagram, where he posted pictures of himself Rollerblading at BottleRock Napa Valley, an annual music and wine festival in California. With the company’s share price rising, there seemed to be no happier place to work than Lululemon, especially the Vancouver offices. Employees could come to work in leggings. There were yoga, Pilates and high-intensity interval training classes throughout the day, as well as on-site massages at one location.

Yet fissures were beginning to show in McDonald’s strategy. In 2023, Lululemon reported that it took a massive writedown on Mirror. Once the pandemic was over, customers no longer wanted to work out in front of something resembling an oversize iPad; they wanted to sweat together again at the gym. It didn’t matter that Lululemon tempted subscribers with bargains on clothes and access to fancy exercise emporiums such as Dogpound, where Taylor Swift worked out. Lululemon stopped selling Mirrors and was saddled with so many obsolete devices, the company mentioned it in its public filings.

The apparel company rolled out beauty products in some Lululemon stores including Anti-Stink deodorant, No-Show Dry shampoo and Sweat Reset face moisturizer. It later added Super Fine face mist, a postworkout spray with ingredients such as Irish moss to guard against pollution and other environmental stressors. Despite its whimsical marketing, its beauty endeavors also proved to be a failure. “That’s a great example of something that was, as it turns out, beyond the scope of where the brand really should be stretched,” says Morfitt, the board chair.

These misfires were compounded by Lululemon’s aggressive push into footwear, which began in 2022 with the unveiling of Blissfeel for women. “Footwear is the natural next step for us to expand and apply our long history of innovation,” he said in a press release. Next up, the company said, were similarly themed women’s shoes with names such as Chargefeel, Strongfeel and Restfeel, with men’s footwear still to come. There were hopes in Vancouver that the new business could eventually generate $1 billion in annual sales.

But Lululemon’s sneaker dreams have yet to materialize. Morfitt says the company hasn’t given up yet, though she doesn’t sound entirely convinced. “My personal view on this is that the future of our footwear business is to be determined,” she says. “I would just say watch this space.” Others, unsurprisingly, are less optimistic. “I don’t think Lululemon has the credibility in footwear,” says Neil Saunders, managing director of GlobalData. “It has the credibility in a lot of other things — at least it used to. But footwear is very different than apparel.”

Although some of these efforts may have been misguided, none seemed to be as baffling as Lululemon’s collaboration with Walt Disney Co. in 2024. Sure, McDonald was a Disney board member, but a line of athleisure garb emblazoned with images of Mickey Mouse and the Lululemon name in a cartoony font seemed a strange bet. “The Lululemon girl is not a Disney adult,” says Casey Lewis, author of After School, a newsletter examining youth culture trends. “For the executive team to not realize that is sort of a stunning revelation.”

Such setbacks were apparently too much for Wilson. He’d never been silent, sounding off now and then on podcasts about how he regretted giving up control of the company. “If I had to do it in retrospect, I would have stayed the CEO,” Wilson told motivational speaker Tony Robbins on his podcast in 2023. But Wilson had been busy with other things, including investing millions of his own dollars in research for experimental treatments for a rare form of muscular dystrophy. He’d also benefited from Amer Sports’ IPO in 2024, which has helped boost his net worth to $7 billion, according to the Bloomberg Billionaires Index, despite the hammering Lululemon’s shares have taken in recent years.

Wilson went back into cage-rattling mode, and his friendly rambles with McDonald ceased. In the spring of 2025 he met with Lululemon board members, raising his concerns about the company’s performance. According to a document filed by Lululemon with the Securities and Exchange Commission, this was the first of several face-to-face meetings spilling over into this year. At one, Wilson deflected a question from the directors by asking, “How can you be on the board if you haven’t read my book?” At the same meeting, Lululemon says, the founder complained that the company’s store workers weren’t as attractive as Alo’s, blaming this on its diversity and inclusion policies. According to Lululemon, Wilson also said he’d advised Alo and Vuori — two newcomers that were chipping away at Lululemon’s customer base — saying they were following his playbook, unlike Lululemon. (“Chip Wilson is not and has never been a paid advisor to either Alo and Vuori,” a Wilson spokesperson says, adding that he’s “often approached for advice.” Vuori says the company never worked with Wilson. Alo didn’t respond to requests for comment.)

Lululemon now finds itself in a troubled spot similar to the one in which Nike put itself, namely stumbling at the very moment a new generation of competitors has swooped in

By the end of 2025, Lululemon announced that McDonald was on his way out. Having collected what was arguably his first scalp, Wilson issued one combative statement after another, detailing Lululemon’s failures, from the writedown of Mirror to the Get Low fiasco. “The board’s only credible path forward is to engage and work with me,” he warned in one of them.

Instead, Lululemon further infuriated Wilson by naming O’Neill the next CEO. Its shares fell, and the founder reacted with an uncharacteristic note of pathos. “I genuinely hope that Heidi is the right person for Lululemon, but a near 30-year veteran of NIKE, Inc. is not the symbol of transformative, creative-first leadership,” he said in an open letter to shareholders. Whatever people thought of Wilson’s tactics, his message was resonating with those watching closely. “Chip’s not wrong,” says David Ian Gray, a retail strategist in Canada.

What Lululemon needed now, Wilson argued, was “an injection of passionate, creative renegades who have a vision that will shake up the status quo.” Rather than mounting a campaign to personally return, he nominated three independent candidates to the board. Only one, Marc Maurer, the former co-CEO of On Holding AG, had apparel industry experience. The others were an ex-chief marketing officer of ESPN and a former head of Activision Publishing. Wilson began inundating shareholders, some of them demoralized Lululemon employees, with proxy solicitations urging them to support his candidates.

It was May, and O’Neill was still under a noncompete with Nike. She couldn’t start her CEO role for four more months. But as Lululemon’s market value sank, she felt the need to speak up. Clad in an oversize black Lululemon Define jacket, O’Neill addressed employees in an internal video, coming across guarded and sphinxlike. “Hi, everybody. September feels far away, I know that,” she said. “But I want you to know I’m already thinking about this company every day.”

O’Neill spoke about how much she loved Lululemon and how eagerly she’d accepted her new job. She’s also done some soul-searching since leaving Nike. “My husband and I put about 10,000 miles on the car, two dogs, fishing gear, no agenda,” she said. She looked as if part of her would have preferred to still be out on the highway. Even so, she said she’d returned believing there was nothing that excited her more than solving the kinds of problems she’d face at Lululemon.

Then she addressed what was surely the issue of most concern. “Since the announcement, some people have been underestimating me,” she said, shedding her smile, a note of defiance creeping into her voice. “Some have been underestimating Lululemon. That’s fine. We’ll let the work answer.”

It’s doubtful she put anybody’s fears to rest about her abilities. After decades rising through the ranks at Nike, O’Neill was leading by 2016 all the retail channels the company owned, including its stores and e-commerce. She’d also championed what seemed at the time a bold new strategy at the company to boost revenue by cutting ties with some of the sneaker maker’s longtime wholesale partners. When CEO John Donahoe arrived in 2020, he tapped O’Neill to become a member of his executive team, where she continued to spearhead this effort.

Nike soared under Donahoe, and then it floundered. The former tech industry executive went all in on lifestyle sneakers and ignored the company’s long history of performance footwear. He also endorsed the shift to direct sales. During the pandemic that strategy looked as though it was working, burnishing Donahoe’s reputation and boosting Nike’s share price. O’Neill, a prominent member of his inner circle who was considered by some to be his possible successor one day, also became a star. In a glowing profile in Elle magazine, she celebrated Nike’s tech emphasis in rapturous, if vague, terms: “Technology is a tool, but I see it as unlocking a vision that’s timeless.”

In 2023, Donahoe promoted O’Neill to president of consumer, product and brand, putting her in charge of, among other things, what Nike described as its “entire global product engine.” By now, however, O’Neill’s pipeline — devoid of new performance shoes — was sputtering. Meanwhile, the decision to focus on direct sales had drastically reduced Nike products at close partner Foot Locker and shut out others including Macy’s, Amazon and DSW. This prompted some to instead fill their shelves with exciting newcomers such as Hoka and On. Nike’s revenue plateaued, its shares fell, and layoffs ensued. By late 2024, Donahoe stepped down. Less than a year after a new CEO arrived, O’Neill was gone too, an apparent management restructuring casualty. “As a result of these changes, O’Neill has decided to retire from Nike after 26 years,” Nike said in a press release.

Lululemon now finds itself in a troubled spot similar to the one in which Nike put itself, namely stumbling at the very moment a new generation of competitors has swooped in. Alo has more than 200 stores, and it had a $10 billion valuation as of several years ago, according to PitchBook; Vuori was recently valued at $5.5 billion and operates about 150 stores. And Target Corp., Old Navy and other chains have become formidable competitors at the lower end, so much so that Old Navy is contemplating spinning out standalone stores for its athleisure lines, according to Women’s Wear Daily. “The competition in our space has always been intense, and we compete very well based on our unique approach,” says a Lululemon spokesperson. (Old Navy’s parent company, Gap Inc., declined to comment.)

The one bright spot for O’Neill is the company’s international business, which continues to grow, especially in mainland China, where sales rose 30% in their first quarter of the year. But even here, Lululemon hasn’t been able to avoid flubs. In late May it drew more than 2,000 participants to a massive yoga event on the Great Wall, only to be ridiculed on social media for using a large drum synonymous with the traditional music of Japan. “This has been a valuable learning for us, and we extend our sincerest apologies,” the company wrote.

Still, O’Neill’s biggest challenge is likely to be managing Wilson. Not surprisingly, she wanted Lululemon to end the proxy war with him before she starts as CEO, according to a person familiar with her thinking who asked not to be named discussing private conversations. As part of his settlement with the company, Wilson gets a huddle once a quarter with O’Neill, at which time the bluntly opinionated founder will surely have plenty to say. Not that Wilson is waiting. Even before the settlement was made public, he was in touch with O’Neill via emails reviewed by Businessweek. “Looking forward to meeting you, hopefully soon,” he wrote. Not long after, Lululemon announced that it would appoint two of Wilson’s board choices and that the founder would get to sign off on the selection of a third, who’d come from a creative background, another of his stipulations.

The question now is, what does Wilson want? He’s made it clear what he doesn’t want. No more unattractive store workers. No more “brand harvesting” collaborations, as he refers to the Disney-type partnerships. No more wasteful tech company acquisitions such as Mirror.

O’Neill must also be aware that she won’t have much time to keep Wilson at bay; by the time she takes the helm, he’ll have already burned through several months of his agreed-to quiet period. It takes about a year to get new products onto shelves, which means she basically has one shot to get it right.

One thing is certain: O’Neill better read Wilson’s book by September. As he’s put it, everything’s in there about how the company achieved its original glory under his leadership. If she still needs a copy, it’s available to download for $14 on his website. —With Erinn Gardner