VANCOUVER — The CEO of Lululemon Athletica Inc. has resigned after he “fell short” of its standards of conduct, the company said in a statement Monday.
Laurent Potdevin, who assumed the top post in 2014, left his position of CEO and as member of the company’s board of directors effective immediately as of last Friday.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and (Potdevin) fell short of these standards of conduct,” the company statement read.
The Vancouver-based athletic apparel maker was unwilling to share further details out of respect for the privacy of the persons involved.
A person familiar with the situation, who spoke on condition of anonymity because of not being authorized to speak publicly, said it was not a single event but “a range of instances” at issue, none of which involved the financial or operational aspects of the business.
Lululemon and Potdevin reached a separation agreement in connection with his resignation, according to a filing to the U.S. Securities and Exchange Commission.
Potdevin will receive a $3.35-million cash payment “as soon as practical” and a further $1.65-million total in monthly instalments made over a year and a half, it read.
In exchange, he agreed not to sue the company and to co-operate with it in the future, among other stipulations.
The retailer’s board of directors has begun searching for a new CEO immediately, the company said.
It also announced it promoted Glenn Murphy to executive chairman of its board, and said three senior officers will take on additional responsibilities and report to Murphy.
The announcement is vague and damaging, Neil Saunders, managing director of GlobalData Retail, wrote in a note.
Lululemon owes investors and customers clarity over why Potdevin was made to depart, he said.
“Failure to do so will likely lead to speculation which could ultimately harm the brand,” wrote Saunders.
Randal Konik, an analyst at Jefferies, noted in a report Monday that the change could lead to “instability” at a time when the company is working toward its goal to become a $4 billion brand by 2020 from the current level of $2.6 billion in sales.
The company’s board of directors appointed Potdevin CEO in December 2013 to succeed Christine Day after she announced she planned to resign.
Prior to taking over for Day, Potdevin served as president of TOMS Shoes, and president and CEO of Burton Snowboards.