This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Lululemon Stock Pops as Founder Chip Wilson Stirs the Pot

NEW YORK (TheStreet) -- Lululemon's (LULU) stock is popping on Monday morning after the Wall Street Journal reported founder Denis "Chip" Wilson was reaching out to Goldman Sachs (GS) for help in regaining the company.

At midday the stock was up 3.7% at $41.71.

Wilson has a long relationship with Goldman from the days the banker took Lululemon public in 2007. For now, the Goldman rating is a neutral and the company has not issued any public statement.

Lululemon's stock that has lost over a third of its value in the past 12 months.

"It's been a horrific year for the company," said David Nelson, Chief Strategist at Belpointe Asset Management.  "Just about everything that could go wrong has. Sales are deteriorating and the company has suffered a blow regarding quality." Anecdotally, Nelson even observed that business at the Lululemon in his town used to be brisk on the weekends, but this past weekend it was empty.

Lululemon Rated a Hold.

Wilson hasn't endeared himself to his customer base. Women were offended by his comments that the quality issue was due to overweight women trying to wear the clothes. Equally offensive, Wilson said he named the company with "L's" because he was amused at hearing Asians trying to pronounce it. In an era of growing customer demand for social responsibility among clothing lines, he has advocated child labor and once said that smoking and birth control pills lead to high divorce rates. 

Nelson believes the stock is just too expensive saying, "It isn't cheap trading at 22x this year's consensus. " Nelson also noted that last week a number of analysts threw in the towel and downgraded the stock with estimates coming down as well. "One potential suitor could be VF Corp. (VFC) , because they already have a presence in athletic wear," said Nelson.


1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs