TORONTO — Lululemon, a brand that based its corporate ethos around personal development and communal fitness classes, shocked the industry late Monday when it announced CEO Laurent Potdevin had resigned for breaching the retailer’s code of 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,” said a statement from the retailer announcing Potdevin’s immediate resignation from the board and from his role as CEO, a position he had held for the last four years.
It’s not a cheap exit: in a regulatory filing after markets closed Monday, Lululemon said it had agreed to pay Potdevin payments totalling US$5 million as part of his separation agreement, dated Feb. 2.
The executive’s transgressions were not detailed by the company, but it was clear that the conduct breach was not related to the company’s operations. Lululemon said it has begun a search to replace Potdevin, who was CEO of Toms Shoes and Burton Snowboards before taking up the helm at the Vancouver-based athleticwear company.
“While this was a difficult and considered decision, the board thanks Laurent for his work in strengthening the company and positioning it for the future,” said a statement from Glenn Murphy, who was promoted to executive chairman of Lululemon amid the shakeup, from his prior role as chairman.
“Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the board’s most important duties.”