W7 Discussion: Lululemon: Turning Lemons into Lemonade

Chapter 12: Lululemon: Turning Lemons into Lemonade: 12-3a Founder Chip Wilson Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Kennisha Holloman ([email protected]) © 2019 Cengage Learning, Cengage Learning

12-3a Founder Chip Wilson

Lululemon founder Chip Wilson is thought of by many as a man with unorthodox opinions.

Although Wilson has not been CEO since 2005, he has been known to do things without

informing top management, such as printing out Lululemon tote bags with the phrase “Who

Is John Galt?” from Ayn Rand’s Atlas Shrugged. A former CEO at Lululemon felt pressured

by Wilson to attend the Landmark Forum, a leadership-development training program which

Wilson highly supports. However, after the new CEO Laurent Pontdevin took over, he

emphasized that the firm would no longer exert as much pressure on employees to attend

the Landmark Forum if they had no interest. Wilson has done other controversial actions

that generated concern from Lululemon’s board.

Much of the controversy around Chip Wilson centers on his statements. For instance, in a

2009 interview with Canada’s National Post Business Magazine, he admitted to having

chosen the company name because “it’s funny to watch [Japanese] say it.” Wilson also

stated on a blog his opinion that the rise in divorce rates and breast cancer among “Power

Women” was due to a combination of smoking, taking birth control pills, and the additional

stress which came from taking on the career responsibilities once held mostly by men. He

attributed Lululemon’s growth as stemming from the coming together of “female education

levels, breast cancer, yoga/athletics, and the desire to dress feminine.”

Another highly controversial statement of Chip Wilson’s involves his opinions regarding child

labor laws. Wilson argued that “third-world children should be allowed to work in factories

because it provides them with much-needed wages.” He claimed this can help lead citizens

of these countries out of poverty. The practice of child labor is a hot-button issue in the

Western world because of the poor working conditions and rampant abuse worldwide. This

support of child labor has angered critics, who believe Lululemon might be exploiting

children in developing countries. They argue that providing children with more education is

much more likely to lift them out of poverty than having them earn low wages at a

dangerous job. Lululemon founder Chip Wilson would continue to make controversial

statements, eventually leading to his resignation as Chairman of the Board.

Chip Wilson later challenged the board, claiming that the current board was not aligned with

Lululemon’s core values. He released this statement at the June 2014 shareholders

meeting and voted against the board’s chairman and another director. Both men were

reelected. A few months later, Wilson sold half of his 27 percent stake to private equity

organization Advent International, who in turn received two board seats on Lululemon’s

board. With less of a stake in the firm, Wilson’s impact on decision making at the

organization is likely reduced.

Chapter 12: Lululemon: Turning Lemons into Lemonade: 12-3a Founder Chip Wilson Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Kennisha Holloman ([email protected]) © 2019 Cengage Learning, Cengage Learning

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