Published by Global Banking and Finance Review
Posted on December 18, 2025
Dec 18 (Reuters) - Lululemon Athletica shares rose nearly 8% in premarket trading on Thursday after reports Elliott Management has built a $1 billion stake in the athleisure wear maker and is working with former Ralph Lauren executive Jane Nielsen for a potential CEO role.
The Canada-based retailer said last week that Calvin McDonald will step down after nearly seven years as its top boss, sparking hopes for a leader who can reverse slowing growth and win back younger shoppers amid fierce competition from trendier players like Alo and Vuori.
The stock has lost nearly half of its value this year, underscoring investor concerns over Lululemon's struggles.
The company's shares were trading at $224 before the bell on Thursday. They had hit a record high of $516.39 in December 2023.
The activist investor has been working closely for months with Nielsen, a retail veteran, a source told Reuters on Wednesday. Nielsen, who sits on the board of Cadbury parent Mondelez, has also served as finance chief at Tapestry-owned Coach.
"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. "I would welcome the chance to discuss this opportunity with the Lululemon board."
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.
Elliott, Lululemon, Wilson and Nielsen did not respond to Reuters requests for comment.
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.
Analysts have said the company will need to accelerate product launches and roll out styles that click with Gen Z to reclaim its cool factor and lure shoppers back.
"The new CEO will need to broaden Lululemon's target consumer. In my view, a good model to look at is the Abercrombie turnaround," said Andrew Rocco, stock strategist at Zacks Investment Research.
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 in Bengaluru, additional reporting by Neil J Kanatt; Editing by Sriraj Kalluvila)
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