In what I suppose was meant to be a hilarious stunt, Lululemon Athletica inc. (NASDAQ:LULU) posted a fake CEO job listingon its website. The job is real, but the listing was facetious. However, it does shine a light on what Lululemon needs — a CEO who can take it to the next phase of its existence. Christine Day was both loved and hated by Lululemon’s core customers and, with her departure, the brand has a chance to get a more unanimous choice on board. It also has a chance to completely screw things up.
While customers may have been lukewarm to Day, investors loved her outlook. The ex-Starbucks Corporation (NASDAQ:SBUX) Day had a global vision for Lululemon Athletica inc. (NASDAQ:LULU), but it was slow to play out. The company’s incredibly conservative expansion plans read like a Jane Austen how-to-land-a-husband guide. All the courting of yoga instructors, vendors, and consumers made for slow going, and gave Under Armour Inc (NYSE:UA) and others a chance to catch up.
Who wants to be a millionaire?
The Lululemon CEO spot is one of the most wide-open hires in recent memory. The company has shown that it’s happy to pull in non-yoga focused executives, but it’s in a position where one good candidate just isn’t enough. Analysts have pointed out that Lululemon Athletica inc. (NASDAQ:LULU) is currently in a management limbo, with executive vacancies in its product, marketing, and logistics departments.
Day will remain with the company until the end of the year, but it seems unlikely that she would hire anyone to fill those roles until the CEO position is sorted out, giving the new chief some say in who he or she will manage. The convoluted logistics of that hiring plan means that the company is going to be less nimble until things get cleared up. If Lululemon was to have another crisis like it did with its see-through pants scandal, it could give competitors a huge leg up.
Waiting in the wings
Competition for yogawear is fierce. Lululemon Athletica inc. (NASDAQ:LULU) is the standout brand, due, at least in part, to its early movement in the sector. When Lululemon started out, people would say things like, “Bah! No one needs to buy stretch pants just for yoga … how silly!” Now, Lululemon is pulling in annual sales of $1.4 billion, and those same naysayers are saying, “Oh yes, I’d love a little of that, please.”
While almost every major apparel manufacturer makes some version of the yoga pants that have made Lululemon Athletica inc. (NASDAQ:LULU) so well off, Under Armour Inc (NYSE:UA) and The Gap Inc. (NYSE:GPS) , through its Athleta brand, are pushing the hardest. Under Armour’s main drive is to increase the amount of revenue that it derives from women. The brand is known as an athletes’ favorite, but it currently dominates mainly in male sports.
In order to hit its revenue goals, Under Armour Inc (NYSE:UA) is working its yoga and bra lines. In February, the company opened a flagship store in Baltimore, with more of the floor space devoted to women’s clothing. If Lululemon slows due to its executive shuffle, Under Armour is going to be there to pick up new customers.