Chip Wilson's War With Lululemon Averted As Founder Sells Half His Stake | HuffPost

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Chip Wilson Is About To Be A Much Smaller Part Of Lululemon

Jesse Ferreras— The Huffington Post Canada

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Slaven Vlasic via Getty Images

NEW YORK, NY - NOVEMBER 06: (EXCLUSIVE COVERAGE) Chip Wilson visits SiriusXM Studios on November 6, 2013 in New York City. (Photo by Slaven Vlasic/Getty Images)

Chip Wilson has averted war with Lululemon after agreeing to sell half of his 27 per cent stake in the company to a private equity firm.

The man who founded the yogawear giant is selling a 13.85 per cent stake in the company for $845 million to Advent International, which will receive two director seats as part of the agreement, according to an investor statement.

“Advent is a strong partner that knows lululemon and our culture and will be an incredibly helpful addition to the Board as we build an even stronger company,” Wilson said in a statement.

The firm was an investor in Lululemon from 2005 to 2009, and helped turn it into a global brand.

The deal will place senior managers Steven Collins and David Mussafer on the board of directors, with the latter taking up the job as co-chairman alongside Michael Casey.

It puts a halt to any attempt at a hostile buyout or potential war for control of the board, though it could also reduce even further Wilson’s sway over the company, sources told the Wall Street Journal.

Both Wilson and Advent will hold off any attempt to take over the company until after a shareholders' meeting in 2016.

Wilson stepped down from Lululemon as non-executive chairman in January after a series of controversies dogged the company last year.

First, the retailer came under fire for selling Luon yoga pants that were considered too sheer by some customers. It recalled the clothes, a move that cut into sales, before rebranding them as the “Second Chance Pant.”

Wilson’s intemperate comments about women’s bodies also resulted in a PR nightmare for the clothing giant.

The news comes just after Wilson’s wife Shannon and their son JJ announced Kit and Ace, a line of street clothing that can work just like athletic wear.

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Lululemon Gaffes

The Name Explained(01 of51)

What’s behind Lululemon’s name? Company founder Chip Wilson has offered an odd explanation. “The reason the Japanese liked (my former skateboard brand, ‘Homeless’) was because it had an L in it and a Japanese marketing firm wouldn’t come up with a brand name with an L in it," he explained to National Post Business Magazine. "L is not in their vocabulary. It’s a tough pronunciation for them. So I thought, next time I have a company, I’ll make a name with three Ls and see if I can get three times the money. It’s kind of exotic for them. I was playing with Ls and I came up with Lululemon. It’s funny to watch them try to say it,” he said. However, The Globe and Mail notes the company’s site says the name was the result of a survey. (credit:CP)

Child Labour Comments(02 of51)

Back in 2005, Wilson’s comments about child labour “went over like a lead balloon” at a Vancouver conference, according to The Tyee. The site reported:“Wilson told the delegates third-world children should be allowed to work in factories because it provides them with much-needed wages. They also say he argued that even in Canada there is a place for 12- and 13-year-old street youths to find work in local factories as an alternative to collecting handouts.” (credit:P Photo/The Canadian Press, Jonathan Hayward)

Ayn Rand Totes(03 of51)

Lululemon’s ‘Who Is John Galt?’ tote bags were a nod to Ayn Rand’s Atlas Shrugged, which promotes individualism and capitalism over collectivism. But some customers didn’t appreciate the political message. The company defended the product on its blog:“Chip Wilson, first read this book when he was eighteen years old working away from home. Only later, looking back, did he realize the impact the book’s ideology had on his quest to elevate the world from mediocrity to greatness (it is not coincidental that this is Lululemon’s company vision).” (credit:Lululemon)

Seaweed Slip(04 of51)

In 2007, Lululemon came under scrutiny for its VitaSea clothing, which the company said was made with seaweed that provided health benefits. A New York Times article challenged the company’s claim and said it found the material showed “no significant difference in mineral levels between the VitaSea fabric and cotton T-shirts.”Independent testing “confirmed the presence of vitamins, minerals, and amino acids in the VitaSea fabric,” a company statement said, but the retailer agreed to remove references to therapeutic benefits of the product. (credit:Photo by Joe Raedle/Getty Images)

Sheer Insanity(05 of51)

Lululemon’s too-sheer yoga pants were perhaps the company’s most infamous headache. The company pulled its defective Luon pants from shelves in March 2013, following customer complaints that the pants were see-through. Lululemon said it expected to lose as much as $67 million from the blunder. To make matters worse for the retailer, it was hit with three class-action lawsuits related to the recall. (credit:Benjamin Norman/Bloomberg via Getty Images)

Bend Over?!(06 of51)

Adding insult to injury? Some customers seeking refunds said Lululemon salespeople asked them to demonstrate the sheerness of their pants by bending over. “I went into my local store to return my Astro pants and Invert crops, both purchased this month. I was asked to BEND OVER in order to determine sheerness. The sales associate then perused my butt in the dim lighting of the change room and deemed them "not sheer." I felt degraded that this is how the recall is being handled,” according to one customer. The company responded, saying it would offer returns “no questions asked.” (credit:AP Photo/Mary Altaffer, File)

Pilling Pants(07 of51)

Even more quality complaints plagued the company following the sheer pants recall. Shoppers weren’t impressed with yoga pants pilling and seams coming apart. And yes, some still complained that the pants were still too sheer. (credit:Photo by Joe Raedle/Getty Images)

Chip Wilson On Women’s Bodies(08 of51)

Wilson put his foot in his mouth when he told Bloomberg TV that "some women’s bodies just actually don’t work" with their products, which have been known to pill or look too sheer.“It’s really about the rubbing through the thighs, how much pressure is there over a period of time and how much they use it,” he said. (credit:John Lehmann, Globe and Mail/CP)

Again With The Thighs(09 of51)

Not long after Wilson’s comment about thighs rubbing together sparked outrage, a Bethesda, Md. shop raised eyebrows when it featured a sign in its window that read: “Cups of chai, apple pies, rubbing thighs?”The brand apologized for the controversial display, saying “We celebrate that thighs rub together -- ours do too.” (credit:Diana Russel, Twitter)

Denim(10 of51)

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Denim(11 of51)

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Denim(12 of51)

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Denim(13 of51)

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Denim(14 of51)

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Plaid(15 of51)

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Plaid(16 of51)

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Plaid(17 of51)

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Plaid(18 of51)

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Plaid(19 of51)

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Toques(20 of51)

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Toques(21 of51)

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Toques(22 of51)

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Vests(23 of51)

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Winter Boots(24 of51)

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Winter Boots(25 of51)

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Winter Boots(26 of51)

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Hockey Jerseys(27 of51)

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Hockey Jerseys(28 of51)

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Socks(29 of51)

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Mittens(30 of51)

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Fur(31 of51)

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Fur(32 of51)

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Fur(33 of51)

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Fur(34 of51)

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Fur(35 of51)

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One Million Layers(36 of51)

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One Million Layers(37 of51)

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One Million Layers(38 of51)

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One Million Layers(39 of51)

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One Million Layers(40 of51)

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One Million Layers(41 of51)

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Canadian Olympic Mittens(42 of51)

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The Toque(43 of51)

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Plaid(44 of51)

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Lululemon Pants(45 of51)

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Moccasins(46 of51)

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Mukluks(47 of51)

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Canada Goose Parka(48 of51)

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The Bay + Smythe Blanket Coat(49 of51)

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Roots Sweater(50 of51)

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Roots Leather Backpack(51 of51)

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