Lululemon's leadership transition just got more complicated—and potentially more interesting. Elliott Investment Management has built a stake of more than $1 billion in the struggling athleisure retailer and is bringing a CEO candidate to the table, according to The Wall Street Journal.
Shares of Lululemon jumped as much as 8.7% on the news Thursday, extending a rally that began when the company announced last week that CEO Calvin McDonald would step down in January.
Elliott's CEO Candidate
The activist hedge fund has been working for months with Jane Nielsen, a former chief financial officer and chief operating officer at Ralph Lauren, on Lululemon. Nielsen is viewed by Elliott as a potential CEO candidate.
Nielsen's resume is impressive: she served at Ralph Lauren from 2016 until April 2025, and previously held senior roles at Coach and PepsiCo. Her experience spans luxury retail, brand management, and operational turnarounds—all skills Lululemon desperately needs.
The Case for Change
Lululemon's problems are well-documented. Shares have fallen 46% this year, giving the company a market value of $24 billion—down from highs near $50 billion. The athleisure pioneer has lost ground to upstarts like Vuori and Alo Yoga while struggling with product innovation and China expansion.
Company founder Chip Wilson has been publicly critical, saying earlier this year that performance is "in a nosedive." When your founder is attacking management in the press, you know there's a problem.
Elliott's Track Record
Elliott is no ordinary activist. The hedge fund, founded by Paul Singer, has a reputation for aggressive campaigns that often result in leadership changes, strategic pivots, or outright sales. Recent targets include Workday (a $2 billion stake), PepsiCo ($4 billion), and Phillips 66.
With a $1 billion position, Elliott is now one of Lululemon's largest shareholders—and it has a clear agenda.
What Comes Next
The timing of Elliott's disclosure is notable. Lululemon has already announced McDonald's departure, so the CEO search is underway. Elliott's arrival with a pre-vetted candidate suggests the hedge fund wants to influence—if not control—that process.
Board dynamics will be crucial. If Elliott can build support among other large shareholders, Nielsen's candidacy could gain momentum quickly. If the board resists, expect a proxy fight.
The Turnaround Challenge
Whoever becomes Lululemon's next CEO faces a daunting task. The company needs to:
- Reignite product innovation after years of coasting on legacy franchises
- Fix the struggling China business
- Defend market share against hungry competitors
- Restore investor confidence after a brutal stock decline
The Bottom Line
Elliott's arrival at Lululemon signals that patience with the status quo has run out. The hedge fund's involvement typically accelerates change—for better or worse. For shareholders, the presence of an activist with a clear plan and a CEO candidate may be exactly what the company needs. The turnaround story is about to get a lot more interesting.
