The bright red ad, in a bus shelter outside Lululemon headquarters in Vancouver reads: Lululemon Buy Under Armour Now!
“Lululemon’s business model is to have no debt and $1 billion in the bank and to be ready for an extraordinary opportunity,” the ad, purchased by Lululemon founder Chip Wilson, goes on to say.
“Under Armour is now weak. They have junk bond debt, too much inventory and technology purchases they cannot monetize.”
The ad calls the takeover an idea whose time has come – except Wilson clarified on Tuesday that the reverse is true: he never wants Lululemon to buy Under Armour.
The ad, which went up about a week ago, was meant to be a joke pointing to the relative value of the two companies and the many ways in which Lululemon is superior to its competitor.
“I would call it classic Chip Wilson Lululemon marketing,” said Wilson in an interview about the ad. “It makes people think.”
Wilson said that while Lululemon has better products, a better business model and was founded on sounder principals, it is undervalued in the marketplace relative to Under Armour, which he said relies on celebrity endorsements to drive growth.
Wilson said he has no interest in returning to the helm of Lululemon, but he thinks it needs new leadership.
“The CEO of Under Armour has a vision and creates a better future for where it is going than Lululemon does, so the market gives them a higher valuation,” he said.
“My job is to get a (Lululemon) CEO that does have a vision that can take a company out of the commodity market,” said Wilson, who credits Lululemon with creating the market for sleek athleticwear that can be worn inside and outside the yoga studio or gym or anywhere else customers want to be active.
A Lululemon spokesperson declined comment, saying the company did not want to be involved in the story. Under Armour did not respond to requests for comment.
“It’s a bit of sour grapes, I think, because he’s no longer on the board,” said Karin Schnarr, assistant professor of strategy at Wilfred Laurier University in Waterloo.
“Insofar as consumers pay attention to what he says, I don’t think it will make much of an impact on the company.”
Wilson has often come under fire for controversial remarks, including remarks that were deemed insulting to women, and for criticizing the board of directors and the CEOs who have led the company since he stepped out of the role in 2005.
Laurent Potdevin has been CEO since 2014.
Wilson said the company ignored questions he wanted answered publicly at the annual meeting of shareholders – Wilson remains the largest Lululemon shareholder.
Under Armour recently attracted some unwanted publicity of its own, after Under Armour CEO Kevin Plank said in an interview with CNBC that President Donald Trump is an asset to the country.
Golden State Warriors star Steph Curry, a paid brand ambassador for Under Armour, responded to Plank’s statement with his own assessment of the new president: “I agree with that description, if you remove the ‘et.’”
Other Under Armour celebrities also distanced themselves from Plank, including ballerina Misty Copeland, and actor and former pro wrestler Dwayne “The Rock” Johnson, who has a signature shoe line with the firm.
With files from Star news services
With files from Star news services
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