- Lululemon CEO Laurent Potdevin resigned suddenly on Monday.
- The company released a statement suggesting that Potdevin engaged in poor conduct.
- CNBC reported on Wednesday that his resignation could be linked to his relationship with a female designer. Souces familiar with the matter confirmed this to Business Insider.
The mystery of Lululemon’s CEO’s sudden resignation is beginning to unravel.
Lauren Potdevin, who had been CEO of the brand since 2014, resigned on Monday. The company released a statement that suggested Potdevin had engaged in poor conduct.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct,” the company said.
CNBC reported Wednesday that his departure was linked to a relationship he had with a female designer at the company. Potdevin was having a relationship with this woman before she resigned in 2014. She was re-hired as a contractor later on, and this contract was not renewed in January 2018.
Sources familiar with the matter confirmed to Business Insider that this relationship was one of several instances where Potdevin felt short of standards of conduct. They also confirmed that the relationship was one of the reasons for his departure.
Former employees described the company culture under Potedevin’s leadership as “toxic,” CNBC reported.
Lululemon declined Business Insider’s request for comment.
Analysts say that not the company’s choice not to confirm these details will be detrimental to the brand’s image.
“Lululemon owes it to investors and to customers to be clear about the reasons Mr. Potdevin was made to depart,” Neil Saunders, managing director of the retail consulting firm GlobalData Retail, wrote in a note to clients. “As a company that prides itself on transparency and openness, we would expect it to have an honest conversation with stakeholders.”
He added: “Failure to do so will likely lead to speculation which could ultimately harm the brand.”
The company is now searching for a replacement CEO and will be run by three members of senior management during the interim period.
“We expect little operational impact as three of Lululemon’s senior leaders are being elevated and are taking on additional responsibilities,” Bridget Weishaar, senior equity analyst at Morningstar, said in a note to clients.
She added: “Although we acknowledge that there is always brand risk associated with such allegations, we think the board’s swift and decisive action will likely mitigate this. In our opinion, the board successfully got in front of this story and took a firm stance both in word and action about the brand’s commitment to the highest levels of integrity and respect.”