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3 Lessons Lululemon and American Apparel Need to Learn

NEW YORK (TheStreet) -- What can Lululemon (LULU - Get Report) and American Apparel (APP) learn from Apple (AAPL - Get Report)? A lot probably, given the first two companies' recent struggles.

The battles between the founders and the boards of both of these apparel companies are heating up and as performance generally suffers, each retailer is being distracted further.

Penny stock American Apparel made waves last week when it abruptly announced that it was terminating its founder and CEO Dov Charney, 45. Co-chairman Allan Mayer cited "an ongoing investigation into alleged misconduct" that forced the board to fire him. Media reports have said Charney had been embroiled with multiple sexual harassment lawsuits, all settled out of court, and had been accused of inappropriate behavior, including him walking around in his underwear at the office, among other things.

It's looking increasingly like Charney is not going down without a fight and considering that he owns 27% of the company's outstanding stock, the board is in for quite a headache. Charney, through his lawyer, has requested to meet with the board to demand his job back, but the board told Reuters that it sees no reason to meet with him. American Apparel announced on Monday that it had hired financial and strategic advisor Peter J. Solomon Company to represent it.

Lululemon's founder Dennis "Chip" Wilson is also apparently gearing up for a proxy fight as news surfaced that the former yoga apparel retailer's chairman was in discussions with Goldman Sachs (GS) to discuss ways to shake up its board of directors or perhaps take the company private. Wilson, who gave up his chairmanship late last year when the company hired its new CEO Laurent Potdevin, has been critical of Lululemon's current board. Wilson had released a statement prior to the Vancouver-based company's annual meeting this month in which said he voted against re-election of two outside directors -- Lululemon's chairman and a former Starbucks (SBUX) executive, Michael Casey, and private equity executive RoAnn Costin Wilson.

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Can Lululemon Regain its Shining Star Status?

TheStreet spoke with retail industry analysts and consultants to gleam some lessons from some of the more successful retailing companies, specifically Apple, Nike (NKE - Get Report) and Ralph Lauren (RL - Get Report), to extract lessons for both Lululemon and American Apparel. Here are three lessons:

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APP $0.01 -26.70%
AAPL $93.74 0.00%
LULU $65.55 0.00%
NKE $58.94 0.00%
RL $93.21 0.00%


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