Lululemon just hired Heidi O’Neill, a 26-year Nike veteran, as their new CEO after a months-long search. She’ll start in September and move to Vancouver to run the yoga pants company.
This hire is interesting because Lululemon built their empire by doing the exact opposite of Nike. While Nike does massive marketing campaigns and endless celebrity collaborations, Lululemon focused on premium fabrics and limited product drops that sell out fast.
Growth Problems
Lululemon had an amazing run for years. Under the previous CEO, they tripled their revenue to $10.6 billion and expanded into 30 countries. They turned from a niche yoga brand into a fashion powerhouse where people wear their blazers to work.
But growth crashed from 19% to just 10% last year. They had some embarrassing product failures, including a Disney collaboration that customers hated. The company’s founder even took out a full-page Wall Street Journal ad criticizing the direction of his own company.
O’Neill comes from Nike where she helped grow revenue from $9 billion to $45 billion over her 26-year career. But Nike has been struggling recently too – they actually eliminated her job this spring during a restructuring.
What’s Next
The big question is whether Lululemon will stick to what made them special or start copying Nike’s playbook. Lululemon customers love the brand because it feels exclusive and focuses on quality over hype. If they start acting like Nike, they might lose what makes people willing to pay $128 for leggings.
