The boss of Lululemon Athletica, the brand known for its expensive yoga leggings and other sports clothing, is to leave the company early next year.
Calvin McDonald, the firm’s chief executive, will depart at the end of January after more than seven years at the helm.
The decision comes amid a run of poor sales for Lululemon in the US, its main market, in recent times and its share price falling almost 50% in the past year.
However, this week the company upgraded its annual revenue forecast after better-than-expected sales in the past few months.
Mr McDonald said the decision to leave the company was taken after discussions with the board.
“As we near the end of our five-year strategy, and with our strong senior leadership team in place, we all agree that now is the time for a change,” he said in a LinkedIn post.
While the Canadian company’s latest results revealed a boost to its sales internationally driven by its business in China, its performance in the Americas has been going in the opposite direction.
The brand’s share price on the US Nasdaq index peaked in late 2023 and has been on a downward trend since. In September, its shares fell sharply after it warned of the impact tariffs imposed by US President Donald Trump would have on its business.
Lululemon’s particular concern was over the ending of the so-called de-minimis exemption, a former duty-free loophole for low-cost goods entering America from countries such as China.
Many of the Canadian company’s suppliers are based in China, Vietnam and other Asian countries. In September, it estimated the newly-imposed import taxes would cost it about $240m (£178.4m) this year.
However, sales in China and around the rest of the world have been positive, driving its net revenues to the start of November to $2.6bn.
“As we enter the holiday season, we are encouraged by our early performance,” said Mr McDonald. However, he said that despite good Thanksgiving period, demand had slowed since as consumers continued to look for cheaper products.
Lululemon has faced increasing competition from lower-priced rivals such as Vuori and Alo Yoga for its products.
Dan Coatsworth, head of markets at AJ Bell, told the BBC that competition had been “fierce”, and that the brand needed to “go back to the drawing board and work out ways to make its products ‘must-have’ items again”.
Mr Coastworth also said that under Mr McDonald the brand had gone through the “embarrassment of having to pull its Breezethrough product line after negative reviews and customer complaints about the leggings being uncomfortable to wear” last year.
The company halted sales of its then newly-launched $98 leggings last summer after shoppers criticized the V-shaped back seam of the tights as “unflattering” and others said the seam at the top of the waistband dug into their waists.
Lululemon was also mocked on social media in 2020 for promoting an event about how to “resist capitalism”.
Lululemon named its finance boss Meghan Frank and chief commercial officer André Maestrini as co-interim chief executives while it searches for a new leader.
Marti Morfitt, chair of the brand’s board, thanked Mr McDonald for “his visionary leadership building Lululemon into one of the strongest brands in retail”.
“During his tenure, Calvin led Lululemon through a period of impressive revenue growth, with differentiated products and experiences that resonated with guests around the world.”
Mr Coatsworth likened Mr McDonalds tenure as “akin to the highs and lows of an athlete hitting their peak and then rapidly going off the boil”.
“He steered Lululemon to greatness as the athleisure trend boomed, with people happy to pay top dollar for posh leggings.
“Then came a series of mistakes which were compounded by factors outside of the company’s control. It’s no wonder Lululemon is looking to bring in fresh leadership,” he added.
