rch 2020. Why was the stock market unimpressed with Heidi O’Neill’s appointment? Some investors noted that O’Neill’s departure from Nike coincided with several years of slowing demand and brand fatigue – issues that mirror those currently facing Lululemon. “We do not expect the market to receive this appointment positively, given O’Neill’s longstanding tenure at Nike, which overlaps with the brand developing many challenges that parallel the ones Lululemon is currently facing,” said BTIG analyst Janine Stichter. Meanwhile, other analysts, including those at Needham and Evercore ISI, attributed the stock dip to investors hoping for a different choice of executive. Elliott Investment Management, which holds a roughly $1 billion stake in Lululemon, has been pushing for the appointment of another retail veteran, Jane Nielsen, rather than O’Neill. As the former COO and CFO of Ralph Lauren and the former EVP and CFO of Coach, both during key periods of brand repositioning, Nielsen was positioned as a change-making executive, rather than one focused primarily on boosting sales, like O’Neill. It should be noted that, with $11 billion in sales last year, Lululemon is not far off from where Nike was when O’Neill first joined the company, a period during which she helped grow revenue from $9 billion to $45 billion. Several retail experts credited O’Neill for her commercial acumen, noting that the bigger challenge ahead will be restoring brand relevance rather than simply driving profitability. As retail strategist Christine Russo, principal of RCCA, told Inside Retail, “When you have many problems, you want someone who has handled many, and that’s how this CEO appointment at Lululemon reads. Lululemon’s problems span product, relevancy, in-store experience, media and more. In my opinion, she is a retail fundamentalist with a lot on her plate. One of the major challenges ahead will be to reestablish Lululemon’s relevancy and cultural significance.” What experts say about Heidi O’Neill’s appointment Melissa Minkow, global director of retail strategy at CI&T, offered a positive assessment of Lululemon’s choice for a new CEO. “O’Neill’s appointment makes sense given her deep experience in the category. Her marketing and product expertise are also well suited to Lululemon’s need to get back to the roots that made it so successful. What really set the brand apart was the quality of its products and consistent alignment with its target audience,” said Minkow. As the athletic wear category has become highly competitive, Minkow explained that Lululemon will have to return to its original formula, with some adjustments, for a chance at a comeback. “I’m hoping to see and hear some plans for how O’Neill will bring technology into the fold, as it will be crucial for keeping up with the target customer’s heightened product and shopping expectations. We’ll need to see advanced customer education, service and product capabilities to restore the level of differentiation Lululemon was once unique for.” Echoing Minkow’s view, Neil Saunders, managing director at GlobalData, commented, “In many ways, O’Neill is an obvious choice. She has a very strong pedigree in the activewear and sporting space, having spent much of her career at Nike. Also, during her tenure, she successfully grew the apparel business. This will allow her to hit the ground running as she has an intimate knowledge of how the industry works and has deep connections to all aspects of it, from product design to supply chains.” Saunders also noted that O’Neill brings a strong customer-centric ethos, shaped by her time at Nike and her role on the Hyatt board – the latter of which is highly focused on hospitality and guest experience. This experience will be helpful as Lululemon looks beyond products to the broader brand experience and customer touchpoints. “The task ahead is significant, but it can be undertaken from a position of relative stability. Despite its lack of growth in North America over recent years, Lululemon is not a terrible business: share losses have been modest, and it is still generating growth. The challenge will be to inject more energy and restore Lululemon as a leader in product innovation. This can be accomplished under O’Neill.” Further reading: Lululemon increases sales amid pressure from founder