Lululemon overhauls leadership team with two new roles

One month into her new job as chief executive at Lululemon Athletica Inc. LULU-Q, Heidi O’Neill has begun an overhaul of the leadership ranks, as she seeks to turn around the struggling activewear retailer.

The Vancouver-based company announced a new structure for its leadership team on Wednesday, with the creation of two new roles – a president and chief product officer, and a chief operating officer – as well as two other high-profile departures.

Ms. O’Neill, who joined Lululemon on Sept. 8 after more than two decades in leadership positions with Nike Inc. NKE-N, has been tasked with revitalizing a brand that helped to build a lucrative industry for fashionable workout clothes – but now faces stiff competition from newer, hotter athleisure brands as well as cheaper “dupes” offering similar styles.

With Wednesday’s appointments, the new CEO has begun to reshape the top ranks at Lululemon.

The new president and chief product officer, Maggie Gauger, was most recently president and CEO of Athleta, the Gap Inc.-owned athleisure brand that is among Lululemon’s competitors.

The company’s press release touted Ms. Gauger’s advancement of Athleta’s “transformation strategy,” which included introducing new products and reshaping the brand. But Athleta has also been struggling, with comparable sales declining consistently for the past year and a half.

Before that, Ms. Gauger also spent more than two decades at Nike Inc., including leading its women’s business in North America.

The new chief operating officer, Joseph Godsey, comes to Lululemon from Walmart Canada, where he was chief growth officer and led the company’s e-commerce business. Prior to that, Mr. Godsey also held leadership positions at Sam’s Club and Adidas.

Both executives will join the company on Oct. 26.

At the same time, Lululemon announced the departures of chief brand and product activation officer Nikki Neuburger, and chief supply chain officer Ted Dagnese.

The company is seeking to hire for three additional leadership roles: a chief brand officer to replace Ms. Neuburger, a chief communications officer and a chief technology officer.

“Lululemon is a rare, extraordinary brand, but we have work to do to build a stronger and more competitive company,” Ms. O’Neill wrote in Wednesday’s press release.

Chief financial officer Meghan Frank and president and chief commercial officer André Maestrini, who led Lululemon as interim co-CEOs for roughly eight months before Ms. O’Neill’s arrival, both remain with the company. Ms. Frank will take on expanded responsibilities overseeing brand and technology roles until the new hires are found.

Lululemon has been struggling as customers in its largest market, North America, have been wooed away to other brands. Last month, the company lowered its forecasts for the second time in just three months, after reporting its second-quarter revenue fell by 5 per cent on a constant currency basis, to US$2.4-billion.

The company has been working to accelerate the time it takes to bring new products to its stores, to better keep pace with trendier rivals; and to revitalize its brand in the minds of shoppers who grew tired of its offerings.

To bolster that effort, Lululemon has been ramping up spending on advertising and community events, while also finding ways to cut costs in the business.

The new leadership team will “work in a more coordinated manner” around its turnaround strategy, Ms. O’Neill wrote in Wednesday’s release.

“That starts with putting product, design, and innovation at the center of how we operate, with the focus and accountability to create a stronger pipeline of differentiated product to raise the bar for our guests across every touchpoint, in stores and online.”