Lululemon names former Nike exec Heidi O'Neill as new CEO

Lululemon on Wednesday named Heidi O’Neill as the athleisure company’s new CEO, effective Sept. 8.

The news comes after the company has seen more than a year of disappointing performance and been embroiled in a dramatic proxy battle, with founder Chip Wilson criticizing the business.

Shares of the company sank more than 5% in extended trading.

O’Neill has held multiple roles at Nike, contributing to the sportswear behemoth’s growth. She also held positions at Levi Strauss, Hyatt Hotels and Spotify.

“Heidi is an inspiring leader and proven, consumer-driven brand strategist, with a rare ability to both imagine a new future for a brand and to create the structure and processes to deliver on that vision,” said Marti Morfitt, the company’s executive chair of the board of directors, in a statement. “We selected Heidi because of the breadth of her experience, her demonstrated success delivering breakthrough ideas and initiatives at scale, and her ability to be a knowledgeable change and growth agent.”

O’Neill said in a statement that she plans to focus on building off of the company’s core foundation and unlock growth in global markets. O’Neill will start with a base salary of $1.4 million, according to an 8-K filing.

“I am humbled by the opportunity and energized by what the team is already building,” she said in her statement. “I look forward to joining the company and helping to define and deliver the organization’s next chapter of success.”

Lululemon has been struggling with weak sales and increased competition, as well as mounting costs from tariffs. In its last earnings report, the retailer said it expects tariffs to cost the company $380 million this year.

Wilson, Lululemon’s largest shareholder, has also been placing increased public pressure on the company to make changes to its board of directors. He did not immediately respond to a request to comment on the appointment.

While at Nike, O’Neill played a key role in the company’s doomed direct-to-consumer sales strategy, where the brand pivoted away from wholesale partners in favor of its own website and stores under former CEO John Donahoe. When current CEO Elliott Hill took over as Nike’s next chief executive, he made it a priority to walk back the direct selling plan.

Prior to leaving Nike, O’Neill also oversaw product and innovation at a time when the brand faced criticism for falling behind on new products and focusing too heavily on the same legacy lifestyle franchises, Dunks, Air Force Ones and Air Jordans. While the franchises briefly led to a surge in sales, fueling Nike’s growth to a $50 billion plus brand, they ultimately became ubiquitous in the market and viewed as uncool by some consumers.

Now, Hill is still working on unwinding that strategy and clearing inventory from those franchises from the marketplace, which has hit Nike’s margins and led to a decline in sales online.