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Dive Brief:
- Lululemon Chief Product Officer Sun Choe is leaving the company later in May to pursue another opportunity, the athletics retailer announced in a press release Tuesday. Lululemon is taking the opportunity to restructure its management team and will not replace her.
- Instead, Global Creative Director Jonathan Cheung will become responsible for product design and innovation strategy, and Chief Brand Officer Nikki Neuburger will become chief brand and product activation officer, adding merchandising, footwear and product operations to her purview.
- Cheung will report to CEO Calvin McDonald, and Chief Merchandising Officer Elizabeth Binder will report to Neuburger. The company said the organizational changes will support its growth plans, speed up product innovation and “further enable its go-to-market strategies.”
Dive Insight:
Lululemon is restructuring its product and marketing teams as one of its top executives exits. Choe joined Lululemon in 2016, became the brand’s chief product officer in 2018 and is credited with helping drive much of Lululemon’s growth in that time.
“Shares are trading down ~3% as of this writing, which we understand given how well-liked and well-respected Ms. Choe was by the Street,” Wedbush analysts led by Tom Nikic said in emailed comments. They noted that during her tenure revenues grew fourfold, reflecting a compound annual growth rate in the low 20s.
“While this can't be attributed entirely to Ms. Choe, we do believe that she played an instrumental part in [Lululemon’s] success over the past 7+ years,” they said.
Choe’s responsibilities will be taken over, in part, by a relative newcomer in Cheung, who joined the brand as creative director in January. Cheung has been reporting to Choe for his first few months at the company, and will now take on a much bigger role with her departure. Neuberger, who is also broadening her scope, joined Lululemon as chief brand officer four years ago.
“We are grateful for Sun’s many contributions to the company over the past seven years, and she leaves us as a stronger, product-led organization with dynamic leaders ready to take us forward,” McDonald said in a statement. “Looking ahead, I am confident in the strength of our Design, Merchandising, and Brand teams, and excited by how the new structure will enable us to solve for the unmet needs of our guests in a more efficient, unique, and powerful way.”
The departure comes just months after Lululemon warned of a softer consumer in the U.S. and reported slower sales in North America in Q4. Net sales at the company still rose more than 15% in the holiday quarter, with Americas net revenue up 9%, but the brand faces an increasingly competitive market as well, according to Nikic.
“[Lululemon] has been a notable laggard in our coverage this year... due largely to concerns that upstart competitors such as Alo and Vuori are causing U.S. growth to slow,” Nikic said, adding that Choe’s departure thus comes “amid this undercurrent of fear.”
via https://www.aiupnow.com
Cara Salpini, Khareem Sudlow
