Finance
Elliott's $1 billion bet on Lululemon fans hopes of a revival
Published by Global Banking & Finance Review®
Posted on December 18, 2025
4 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 18, 2025
4 min readLast updated: January 20, 2026
Elliott Management's $1 billion investment in Lululemon aims to revive the brand's growth with potential leadership changes and a focus on Gen Z appeal.
By Savyata Mishra and Neil J Kanatt
Dec 18 (Reuters) - Elliott Management's $1 billion bet on Lululemon and a potential CEO candidate have sparked hopes for a quicker turnaround at the athleisure wear maker that is looking to revive its "cool factor" and draw shoppers back.
The Canadian retailer said last week that Calvin McDonald will step down after nearly seven years as its top boss, leaving the brand searching for a leader who can reverse slowing growth and tackle competition from trendier upstarts like Alo and Vuori.
Lululemon has floundered since its post-pandemic peak at the end of 2023, when the company was still riding high on customers sticking to COVID-era preferences for comfortable clothing.
Since hitting a record $516.39, shares have lost 60% of their value.
The company has lowered its forecasts for two straight quarters this year before a recovery in its most recent earnings period that ended on November 2.
"Lululemon should implement fast fashions and introduce an assortment that will pull customers from Alo and Vuori — especially Gen Z customers. Fast fashion requires a much better supply chain than is currently in use at Lululemon," said Brittain Ladd, a strategy and supply-chain consultant at Florida-based Chang Robotics.
NOT COOL ENOUGH?
Analysts have also said the company will need to upgrade its fabrics, use fresher designs and accelerate product launches that click with Gen Z and lure shoppers back.
Some shoppers have complained about high prices and the quality and lack of newness of Lululemon's products.
"They have not been able to come up with anything new, and at the same time, their competition — same issue that's affecting Nike and the others — has only increased," Morningstar analyst David Swartz said.
Shares rose as much as 9% at $225.98 on Thursday, betting in part that Elliott's $1 billion investment means change is coming sooner than later.
The activist investor has been working closely for months with former Ralph Lauren executive Jane Nielsen for a potential CEO role, a source told Reuters on Wednesday.
POTENTIAL CEO KNOWN AS A TURNAROUND STRATEGIST
Nielsen, who sits on the board of Cadbury parent Mondelez, has also served as finance chief at handbag maker Coach before it became a part of Tapestry. She has earned a reputation as a turnaround specialist after helping revive sales at Coach and Ralph Lauren when both were losing ground to rivals.
"Lululemon is one of the most powerful brands in retail, defined by exceptional products, deeply engaged communities and significant global potential," Nielsen said in a statement to the Wall Street Journal on Wednesday. "I would welcome the chance to discuss this opportunity with the Lululemon board."
Elliott, Lululemon and Nielsen did not respond to Reuters requests for comment.
"Elliott views Nielsen very favorably — they are explicitly pushing for her appointment and see her as a 'seasoned retail operator' capable of restoring momentum," said Brian Mulberry, senior client portfolio manager at Zacks Investment Management.
Lululemon's founder and largest individual shareholder Chip Wilson has also called for an urgent CEO search, led by new, independent directors with deep company knowledge to restore a product-first focus.
With a 4.3% ownership, Wilson's stake is valued at about $988 million, according to LSEG data, making Elliott one of the top shareholders in Lululemon, which is valued at nearly $25 billion.
Elliott's move caps off a busy year for the hedge fund that made investments in PepsiCo and had a proxy fight at Phillips 66.
"Elliott is famous for agitating for change. These positions aren't built overnight, so Lululemon's board probably saw this coming," said Brian Jacobsen, chief economic strategist, Annex Wealth Management.
Lululemon trades at a forward price-to-earnings ratio of 16.37, while Gap trades at 11.88 and American Eagle at 16.81, according to LSEG data.
(Reporting by Savyata Mishra, Neil J Kanatt in Bengaluru and Nicholas Brown in New York; Writing by Aishwarya Venugopal; Editing by Sriraj Kalluvila)
A stock market is a collection of markets where stocks (shares of ownership in businesses) are bought and sold. It provides companies with access to capital and gives investors a slice of ownership in a company.
A turnaround strategy is a plan implemented by a company to reverse its decline and improve its performance. This often involves restructuring, cost-cutting, and focusing on core business areas.
An activist investor is a shareholder who uses their equity stake in a corporation to promote changes they believe will increase the value of the company, often pushing for changes in management or strategy.
Explore more articles in the Finance category
