Chip Wilson has averted war with Lululemon after agreeing to sell half of his 27 per cent stake in the company to a private equity firm.
The man who founded the yogawear giant is selling a 13.85 per cent stake in the company for $845 million to Advent International, which will receive two director seats as part of the agreement, according to an investor statement.
“Advent is a strong partner that knows lululemon and our culture and will be an incredibly helpful addition to the Board as we build an even stronger company,” Wilson said in a statement.
The firm was an investor in Lululemon from 2005 to 2009, and helped turn it into a global brand.
The deal will place senior managers Steven Collins and David Mussafer on the board of directors, with the latter taking up the job as co-chairman alongside Michael Casey.
It puts a halt to any attempt at a hostile buyout or potential war for control of the board, though it could also reduce even further Wilson’s sway over the company, sources told the Wall Street Journal.
Both Wilson and Advent will hold off any attempt to take over the company until after a shareholders' meeting in 2016.
Wilson stepped down from Lululemon as non-executive chairman in January after a series of controversies dogged the company last year.
First, the retailer came under fire for selling Luon yoga pants that were considered too sheer by some customers. It recalled the clothes, a move that cut into sales, before rebranding them as the “Second Chance Pant.”
Wilson’s intemperate comments about women’s bodies also resulted in a PR nightmare for the clothing giant.
The news comes just after Wilson’s wife Shannon and their son JJ announced Kit and Ace, a line of street clothing that can work just like athletic wear.