Canadian retailer Lululemon's founder urges annual board election

Lululemon Athletica Inc founder Chip Wilson criticized the Canadian yogawear retailer's board on Wednesday, calling for annual election of the entire board to make directors more accountable for the company's performance.

Wilson, who is the company's largest shareholder with a 14.2 percent stake, said the board should be declassified to make it more effective and not staggered, where only some directors stand for election each year.

Wilson said he was convinced that Lululemon did not have the right leadership to make changes necessary to "win in the current global, multi-channel and dynamic environment."

Lululemon told Reuters in an e-mail that it has "the right board of directors and leadership team in place".

Wilson told CNBC that he could help as a consultant to the company if the board structure was changed, calling Lululemon his child. Lululemon declined to comment on the possibility.

Since the current management was appointed in December 2013, peer Under Armour Inc's stock rose 79 percent while that of Nike Inc's have risen 45 percent, Wilson noted in a letter to shareholders.

Lululemon's shares have dropped 8 percent in the same period.

A high-profile recall of Lululemon's signature yoga pants in March 2013 for being too see-through led to top executive departures. The damage was compounded when Wilson said not all women are suited to wear Lululemon.

Lululemon has since worked to improve quality and solve supply-chain problems, while laying the groundwork for faster international growth. It has expanded its offerings to include more seasonal and fashionable gear to be worn outside the gym.

"The current management team has actually done a nice job... I think they have invested wisely and I think they managed to regain their core consumer back into the stores," Morningstar analyst Bridget Weishaar said.

Wilson, who founded Lululemon in 1998, left the board in February 2015 after disagreements with fellow directors.

He had withdrawn from day-to-day management in early 2012, and stepped down as chairman in December 2013.

Wilson launched Kit and Ace, a luxury casual wear company, in July 2014.

Lululemon's shares were up 1.9 percent at $66.28.