How Lululemon Continues to Make Its Mark After Chip Wilson Stepped Away

If there was any hint that the new guy would be different than the old guy, it was made on December 9, 2013. That’s when Lululemon announced that unassuming French executive Laurent Potdevin would be the company’s new CEO—and that outspoken board chair Chip Wilson would be stepping away from the company he had founded some 15 years prior.
 

That same day, the Vancouver-based yoga apparel retailer released a video to its YouTube channel introducing people to the new guy, who had previously served as president of Toms Shoes. The video, all 62 seconds of it, features a series of moody vignettes: the alarm clock ringing at 6 a.m.; Potdevin, in loose-fitting clothing and Toms shoes, walking to the kitchen to grab his morning coffee; a shot of a side table stacked with inspirational reading (The 10 Essential Hugs of Life; The First 90 Days; Good to Great). And then, the CEO-designate sitting down at his dining room table, signing what appears to be an offer letter, taking off his shoes and assuming a yoga pose. All without speaking a word.

He’s barely issued a word since. No interviews, no media—just the odd prepared statement at investor conference calls or company events. (BCBusiness has been trying for 18 months to secure a chat with the new guy, to no avail.) Chip Wilson, by contrast, was never far from the limelight. But does it really matter?
 

According to Daniel Skarlicki—the Edgar Kaiser professor of organizational behaviour at UBC’s Sauder School of Business and a self-described “student” of Lululemon—not really. “As I understand it, what Laurent did in his early days was what he needed to do: he listened and he listened loud. He was in the stores, he travelled a lot; within the first month, a lot of staff had met him.” 

Skarlicki says it’s critical for Potdevin to deliver results, but in the right way: “Once he builds credibility, then we might see him changing and coming out more. But not all CEOs are obvious in the press.” He points to the example of Amancio Ortega, the founder and CEO of Zara (and according to Forbes magazine, the world’s second-richest person). “You’d never know who he is. He never gives interviews. There aren’t any pictures. But he leads one of the most successful brands in the world.”

Almost two years in—and despite a somewhat rocky Q2 in 2015 (Lululemon shares plunged over 16 per cent on September 10 following news of shrinking margins)—Potdevin has been delivering results. Same-store sales are up. The company has expanded into a variety of new markets, including Hong Kong, Dubai and Germany (the Hong Kong outlet quickly became Lululemon’s most productive store in terms of sales per square foot). And Potdevin has repaired the reputational damage wrought by the “sheer pants” controversy—regaining the trust of Lululemon’s devoted customers and, perhaps more important, the respect of his 8,600-plus employees: an anonymous survey by recruiting website Glassdoor ranked Potdevin the top CEO in Canada in 2015, with 93 per cent of Lululemon employees approving of the way he’s running the company.
 

The way Potdevin is running things is definitely different from the ebullient Wilson—or even his immediate predecessor, Christine Day, who, while lauded for her ability to grow the brand, struggled to get out from under the founder’s shadow. Potdevin’s is a quiet leadership—and according to UBC’s Skarlicki, that might be just what the company needs right now.

 

“What Laurent brings to the story is that he understands technical design, he understands retail, and he understands a strong brand. That’s why they hired him, and I think he’s well positioned to lead the next phase of growth that they’re after.
 

“But you can’t be the old guy,” he continues. “Most importantly for leadership, you need to be authentic to who you are. Getting a 93 per cent rating on Glassdoor does not come by accident. That’s a sign he’s got things going well internally—that he’s doing something right.”