Lulu explanation falls short

Photo: The Canadian Press

Shareholder advocates and analysts are calling on Lululemon Athletica for more disclosure surrounding the abrupt departure of its chief executive who "fell short" of the Canadian athleisure company's conduct standards.

FAIR Canada executive director Frank Allen says Lululemon's disclosure was "thin" and shareholders and investors are entitled to a full explanation for something of this significance.

The Vancouver-based apparel maker stayed mum today after announcing yesterday that CEO Laurent Potdevin had left the firm and was no longer on its board of directors.

In a filing to the U.S. Securities and Exchange Commission, Lululemon says it will pay Potdevin $5-million over a year and a half in exchange for, among other stipulations, agreeing not to sue.

Corporate governance expert Richard Leblanc says Lululemon's public statements on the matter are "bordering on inadequate," leaving shareholders and investors to make inferences.

Canaccord Genuity analyst Camilo Lyon says the Lululemon board has moved quickly to quarantine the fallout, but judging by the company's specific language in its statement, "we can only assume there were claims of inappropriate behaviour."