lesh and blood. She is the reason Lululemon exists. And, according to Wilson, she is the reason Lululemon is in trouble. The nosedive ad Wilson’s relationship with Lululemon has never been straightforward. He stepped down as chairman in 2013 after claiming the brand’s now-infamous sheer-pants problem – a recurring quality-control issue in which leggings became transparent during workouts – was down to the women wearing them, not the product itself. “Some women’s bodies just don’t work for the pants,” he said in a TV interview. “It’s really about the rubbing through the thighs, how much pressure is there over a period of time.” The backlash was damaging, and Wilson lost nearly half his fortune in the fallout. He resigned from the board entirely in 2015, six months after a public falling-out with fellow directors over strategy – a disagreement that prompted him to sell half his stake to a private equity firm for US$845. And yet Wilson never fully walked away. A decade later on October 7, 2025, Wilson took out a full-page advertisement in The Wall Street Journal. The headline was stark. The message was starker: Lululemon, the company he founded in Vancouver in 1998 after walking into a yoga class and noticing women struggling in saggy, sweat-soaked cotton, was in a “nosedive”. The brand he had built from a single studio-meets-retail-shop in Kitsilano – a company that didn’t just grow a business but invented an entire category – had, in his view, lost its soul. “The world doesn’t need another bland, quarterly-driven apparel company,” Wilson stated. “It needs bold vision. It needs Lululemon to fly again.” The language was dramatic, but the numbers gave it weight. After years of double-digit revenue growth, Lululemon’s US sales had started to slip. Margins were under pressure. The company warned that tariffs and rising import costs could shave as much as US$240 million from gross profits in 2025. Since January of that year, the stock had lost more than half its value – and as of late May 2026, shares are down nearly 39 per cent year to date, having fallen more than 60 per cent over the prior 12 months. The market cap Wilson once envisioned hitting US$100 billion by the brand’s 25th anniversary had collapsed to a fraction of that ambition. What followed the ad was one of the year’s most closely watched proxy battles in consumer retail. Wilson, who owns 8.7 per cent of the company, launched a campaign website to rally shareholders and nominated three independent board directors: Marc Maurer, former co-CEO of On Holding; Laura Gentile, former CMO of ESPN; and Eric Hirshberg. The campaign had one throughline: Lululemon had drifted from product-first principles into what Wilson called “GAP-ification” – a slow corporate death driven by merchants and MBAs chasing quarterly Wall Street projections, at the expense of the creative risk-taking that had made the brand great. “Innovation dies, the brand becomes predictable, customers drift, and the best creative people leave,” he warned. Forgetting the muse Central to Wilson’s diagnosis was the concept of the muse. In the early days of Lululemon, Ocean was not a marketing exercise – she was a design philosophy. Every product decision was filtered through a single question: would she want to wear this? That clarity of customer gave the brand an almost cult-like coherence. The original Lululemon customer was an upscale, yoga-obsessed woman who drove a Land Rover and sought meaning as much as she sought the perfect pair of leggings. She inspired culture rather than following it. And in Wilson’s view, the board’s pivot toward mainstream appeal had severed that connection. “Lululemon forgot its muse,” he wrote. “By drifting toward the mainstream, and trying to appease everyone, Lululemon lost 50 per cent of its market cap earned from ‘brand power.’” The board fired back. In a shareholder letter, it accused Wilson of holding “outdated perspectives” and “troubling conflicts of interest”. It argued his nominees were less qualified to navigate the realities of a contemporary global retail business. The company was not without its own forward motion: it had already appointed Heidi O’Neill, a former Nike executive, as incoming CEO, set to begin in September when her non-compete expires. But the proxy contest ended not with a vote, but a deal. In late May 2026, Lululemon agreed to appoint two of Wilson’s nominees, Maurer and Gentile, to the board following the June 25 annual meeting. A third director, selected jointly with product and brand expertise, will be appointed by October 1. In exchange, Wilson agreed to cap his stake at 10 per cent and refrain from disparaging the company for 18 months. In a gesture of symbolic circularity, Lululemon agreed to donate to Kitsilano Beach, the neighbourhood where it all began. “We are pleased to reach this agreement with Chip Wilson, which allows Lululemon to focus on continuing to strengthen its performance,” said executive chair Marti Morfitt. Wilson called it “meaningful progress toward restoring the company’s product-first vision.” The hardest stretch The settlement closes one chapter but opens a more complicated one. A new CEO, a refreshed board and a brand in genuine need of creative reinvention now face a market that has moved on in ways that complicate any simple return to origins. Alo and Vuori have captured a new generation of aspirational activewear consumers. The competitive moat Lululemon once held is narrower than it’s ever been. And Ocean, if she still exists in the same form Wilson imagined her, is now in her mid-fifties. The question hanging over Lululemon’s next chapter is not whether Wilson was right about the diagnosis. On that point, even his critics concede the fundamentals. The real question is whether a brand can return to a muse, or whether it must find a new one. Further reading: Why aren’t investors sold on Heidi O’Neill as Lululemon CEO?