Coach handbags and Ralph Lauren dresses have all benefited from this veteran executive’s touch, helping them win back lost customers and boost profits.
- The Wall Street Journal reported on Wednesday that Elliott has built a stake of over $1 billion in the company and is seeking to help Lululemon turn its fortunes around by bringing in a new CEO.
- Last Thursday, in a surprise move, Calvin McDonald announced his departure from the CEO role effective next January.
- The activist investor is pushing for Jane Nielsen, a well-known retail executive, to lead Lululemon out of its struggling phase.
The past week has been nothing short of a crazy ride for Lululemon Athletica, from results that were better-than-expected to CEO Calvin McDonald announcing his departure in January, and now in the news for Elliott Management taking a stake and reportedly spearheading the search for a new CEO.
An activist investor push is often considered a move that might help revive a struggling company. Lululemon is currently navigating a challenging U.S. environment, where sales have lagged, demand is tapering off, and innovation is taking a hit, prompting customers to seek alternatives from competitors such as Alo Yoga and Vuori.
And Elliott could help Lululemon regain its lost fame, a reputation that made the company a go-to place for yoga pants and its belt bags, before the dearth of innovation led to the sportswear maker losing market share.
Elliott Amasses $1 Billion Stake In LULU
The Wall Street Journal on Wednesday reported that Elliott has built a stake of over $1 billion in the company and is looking to help Lululemon turn its fortunes around by bringing in a new CEO, someone familiar with the apparel world and the luxury sector.
The activist investor is pushing for Jane Nielsen, a well-known executive in the retail sector, to lead Lululemon out of its struggling phase and succeed McDonald, who also came under fire from founder Chip Wilson.
Who Is Jane Nielsen – The Potential LULU CEO?
Nielsen was most recently the Chief Financial Officer and Chief Operating Officer of Ralph Lauren. She had joined the company as CFO in 2016 and assumed the role of COO in 2019.
She has led Ralph Lauren through a rough few years when the pandemic halted buying behaviour and a downturn in demand for luxury apparel and goods, as consumers exhausted their pandemic-era savings.
In May 2024, Nielsen departed Ralph Lauren as CFO and remained as COO until March 2025, as part of a succession plan in which the company appointed Justin Picicci, an insider, as the new finance head.
Before joining Ralph Lauren, Nielsen served as CFO of Coach, owned by the luxury powerhouse Tapestry, helping the company emerge from a rough patch, including a loss of market share to competitors and excess inventory. She was the CFO of the handbag maker from 2011 to 2016, following her long stint at PepsiCo.
At PepsiCo, Nielsen spent 15 years in various senior financial roles, including Senior Vice President and CFO of PepsiCo Beverages Americas and the Global Nutrition Group.
Ralph Lauren Under Nielsen’s Leadership
The current CFO of Ralph Lauren has called Nielsen “an iron fist with a velvet glove.” When Nielsen joined Ralph Lauren in 2016, the company was losing sales and needed to rebuild its brand to serve millennial and Gen Z shoppers better.
She also guided the company through the pandemic lull, when demand completely tapered, and the subsequent luxury demand boost from consumers sitting on piles of cash saved during the lockdowns.
Nielsen is known to have boosted profits during her time at Ralph Lauren, ensuring the company continued to reach new audiences and uphold its luxury brand.
LULU’s Past Week In A Nutshell
Last Thursday, in a surprise move, McDonald announced his departure from the company in January. Things did not go as well for him over the previous two years, with founder Wilson also criticizing how Lululemon was being led.
McDonald has acknowledged that the products have become irrelevant and that product life cycles run too long in many core categories, particularly in lounge and social. In recent years, rising competition has reduced customer visits to Lululemon stores, prompting the company to refine its strategy.
The U.S. market has been particularly challenging for the company, with tariffs a recent factor that has burdened it. Demand for products from giants and well-known brands such as Nike, Puma, and Lululemon has taken a hit due to a lack of innovation in comfort and style.
Shares of Lululemon have jumped over 11% just in the last week since the quarterly results and announcement of McDonald’s departure.
Elliott's Other Activist Moves This Year
In September, Elliott disclosed a $4 billion stake in PepsiCo and began pushing the company to change its portfolio and improve its share price. The firm called out PepsiCo for its strategic missteps in its beverages business and for lagging behind peers such as Coca-Cola.
This month, PepsiCo decided to make changes to its business after engaging with Elliott, with the company now focusing on affordable price tiers by brand and channel and lowering the prices of some food items in the coming year.
Earlier this year, Elliott launched a boardroom fight with Phillips 66, saying the company’s stock could nearly double to $200 if it either sells or spins off its midstream business. Eventually, in May, Elliott and Phillips 66 each won two seats on the company’s board.
Elliott also disclosed an investment in Honeywell in 2024, prompting a push to break up the conglomerate. Honeywell said this year that it would split into three independent, publicly traded companies. The activist investor also had a boardroom battle with Southwest Airlines, with both parties eventually settling by adding five Elliott nominees to the board and allowing CEO Bob Jordan to retain his job.
What Is Retail Thinking?
Retail sentiment on Lululemon was in the ‘extremely bullish’ from ‘bearish’ territory a month ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
The retail user message count on the stock has jumped by over 314% in the last year, and the number of users adding the ticker to their watchlist on Stocktwits has increased by 21%.
Shares of Lululemon have declined by over 45% so far this year, underperforming Nike, which has fallen 13% year-to-date.
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