Heidi O’Neill Deserves a Chance to Succeed at Lululemon

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Good morning, friends! Welcome back to The Kicks You Wear. Thanks so much for reading today. I appreciate you giving me a bit of your time. Cheers to the weekend and the NFL draft. Today is somebody’s biggest day of the year.

In today’s newsletter, we tackle why Lululemon’s investors seem so upset about the company’s new appointment of ex-Nike No. 2 Heidi O’Neill as the company’s new CEO. Some of the criticisms out there are fair. Others? Let’s pump the brakes a bit.

Plus, LVMH-backed private equity group, L Catterton, is taking its sports investment to the next level alongside some of the world’s most popular athletes. Smart move considering how massive some of these contracts are getting these days.

Quick hits:

• BoF’s Shayeza Walid wrote a fascinating story on the textile recycling industry and where it goes from here. I immediately thought of Nike’s deals with Syre and Loop on this one. That business could be key if oil prices continue to rise.
• Priya Rao reveals the secret to Ulta Beauty World’s success in her latest Full Coverage newsletter. Subscribe!
• StockX just unveiled a new feature allowing sellers to store and sell shoes without actually having them in their possession. Interesting move here.
• I thought this piece on Tim Cook’s style was interesting. Was Apple’s former CEO stylish? Nah. Not to me. He was just super rich. A fascinating read from NYT, nonetheless.

Let’s jump in.

Heidi O’Neill Finally Gets Her Shot

After months of waiting and speculation following Calvin McDonald’s exit, Lululemon finally appointed a new CEO in former Nike executive Heidi O’Neill. So why doesn’t anyone seem happy about it?

The state of play: Lululemon’s share price dropped by 13 percent on Thursday following O’Neill’s appointment. There were three central reasons analysts cited for investors’ bearishness toward the company.

1. O’Neill’s start date won’t come until September. That’s a five-month window — even longer if you start the clock from when McDonald stepped down in January. While Meghan Frank and André Maestrini can continue in their roles as co-CEOs, questions about the company’s path back to growth will go unanswered til then.
2. O’Neill’s Nike history seems to be a major point of concern. She was the former No. 2 at Nike, serving as president of consumer, brand, and product until late 2025, when she left the role. She oversaw the brand’s direct-to-consumer business under John Donahoe, which ultimately didn’t end well, but it’s worth noting that she was there during some of the company’s best years when being an ex-Nike exec was a golden ticket in sportswear. Today, it seems, it’s the opposite.
3. Chip Wilson’s proxy battle against Lululemon’s board is also still on the table. O’Neill was not one of the former CEO’s preferred candidates. There’s also activist investor firm Elliott Investment Management, which backed former Ralph Lauren CFO Jane Nielsen as its candidate. Wall Street listens when Elliott makes a judgment. While the board doesn’t have to pay either Wilson or Elliott any mind, fighting a battle from within the company certainly doesn’t help chart a proper course of action for issues on the outside.

What they’re saying: BNP Paribas was particularly down on O’Neill, calling her “Heidi O’No” and saying that her hire points to Lululemon still seeing itself as a growth company when it’s not.

“We also know this because the board approved plans for this year to grow square footage low double digits despite comps remaining negative,” BNP’s note said. “We all know it ends in tears when square footage is growing but comps are negative.”

The other side: Doesn’t this all feel like a bit much? The negative sentiment pouring in here is an understandable reaction to what has been a tumultuous last couple of years for Lululemon. When it rains, it pours. And it’s been raining for a while in Lululemon’s case. The company has lost ground to smaller challengers like Alo and Vuori over the last few years as consumers and investors have complained about stale products. Its stock is down over 70 percent from its late 2023 peak, at the tail end of the pandemic athleisure boom.

While Lululemon isn’t growing like it once was, it is still growing, and it’s still the leading brand in the activewear space by far, with $11.1 billion in annual sales for its 2025 fiscal year, up 5 percent. That’s not a terrible spot to be in — especially considering how chaotic things have been behind the scenes.

Reality Check: The concern about O’Neill’s recent history at Nike being an indicator of her future at Lululemon misses the mark. O’Neill was at Nike for nearly 30 years from 1998 to 2025. There’s a lot of ground to cover there. In the end, it’s hard to lay the errors of John Donahoe at her feet.

“The Nike issues were really not caused by the people down the line, but really caused by Donahoe himself,” Matt Powell, a senior advisor at BCE Consulting, told me. “That’s an unfair comparison.”

Be smart: It’s understandable why Lululemon thinks O’Neill is a good fit. She was, after all, once considered a legitimate possibility to head up Nike. She’s got plenty of experience in areas where Lululemon thrives.

• O’Neill was the VP of Nike’s women’s division and women’s training and fitness from 2007 to 2014.
• She also grew Nike’s DTC business and reshaped its digital strategy after taking over as the president of direct-to-consumer in 2016.

The big picture: It’s fair for detractors to say that O’Neill’s hire won’t wipe away Lululemon’s problems. The company still needs a new, fresh product. Strengthening its men’s category remains a solid opportunity she’ll need to capitalise on. Plus, the Chip Wilson problem certainly isn’t going away (O’Neill can hope that he will be too busy with his new venture to care about what Lulu is doing).

It’s far too early to say how this will go. But what I can confidently say is that O’Neill getting this opportunity makes a lot of sense to me. I think it’s worth waiting to see what happens.

L Catterton Invests in Sports

Now this is what you call a sports collaboration. LVMH-backed private equity group L Catterton announced a new strategic partnership with investment firm Patricof Co and its roster of 250 athlete investors to launch a new fund.

Details: The initiative, called Champion Athlete Managing Partner (Champ for short. Yes, it’s corny), is aiming to raise $500 million to invest in consumer companies, according to the Financial Times.

• The athletes, who include names like NBA star Kevin Durant, star gymnast Livvy Dunne, NFL QB Joe Burrow and more, have already raised $50 million of the $500 million Champ is raising.
• The athletes will also partner with the brands the fund invests in to raise their profile and value.

Basically, Champ uses its capital to invest in Brand X. A high-profile athlete like Kevin Durant or Mike Trout, who has invested in the fund, would then lend their likeness to the brand in some way to boost its value.

The why: L Catterton CEO Scott Dahnke highlighted athletes as the key to unlocking value for brands in the current fragmented multimedia landscape. “Our proprietary research shows that athletes are among the most trusted and influential voices to emerge in this landscape,” he said in a press release.

My take: I’m unsure who is really trusting Mike Trout that much when it comes to the products that influence their daily lives, but the thinking here is sound. This is why there are so many athlete collaborations out there these days.

Even if Mike Trout won’t influence everyone, there’s some tortured Angels fan out there who hangs on to his every word. That’s what Champ is literally banking on.

Another Round of Nike Layoffs

In something that has become all too familiar with Nike, the company announced another set of layoffs on Thursday.

Details: This time, 1,400 employees across the organisation are affected by the move, with most from the tech department.

• These cuts are still part of the brand’s “Win Now” initiative, which company chief operating officer Venkatesh Alagirisamy said is in its “final stretch” in a note issued to employees on the changes.

What they’re saying: Alagirisamy’s note to employees detailed how this move was the next step in the company’s revamp of its global operations team.

“Over the coming months, we will continue evolving Global Operations to better serve athletes and the business with more speed, simplicity, and precision,” he wrote. “Some of that work is happening now and more will continue over time as we align our teams, capabilities and footprint to the future needs of the company.”

Why this matters: This is the second round of layoffs the brand has had in the last few months. Nike cut 775 jobs in January to accelerate automation. It then followed those layoffs up with another cut to Converse in February.

Now, here we are, just a few months later, in April, and it’s the same story. From Alagirisamy’s note, it sounds like there’s potentially more coming as the revamp continues.

The big picture: New regimes mean restructures. But Nike has been restructuring for a long time now and no one seems to know when the end is coming. That’s not a great sign.

Nike Keeps Crushing Cars for Your Attention

It seems Nike has found a unique way to take out some of its frustrations.

What you’re seeing: The photo above was taken by our brilliant BoF intern, Austin Kim (who published his first feature this week that you should absolutely read!) It’s a giant brick on top of a car on Mulberry Street in New York City. This is the latest promotion for Nigel Sylvester’s upcoming “Brick after Brick” Air Jordan 4 collab.

If you’re wondering, “Wait, haven’t I seen this before?” don’t worry. You’re not losing your mind. You have. Nike also crushed a car with a football in promoting its TOMA street football tournament in South Korea last year. That was a nod to another car the brand crushed in 2004 for its Euro campaign.

These poor cars, man.

#TheKicksWeWear

This is the community section of the newsletter where you (Yes, you!) send me your best fits and kicks from the week. Feel free to send submissions to michael.sykes@businessoffashion.com or shoot me a message via social channels @MikeDSykes

Y’ALL KNOW WHAT TIME IT IS! LET’S GO.

First, the homie Dave came through with the El Vuelo Air Jordan 3s. These are insane.

Jess came through with the Air Jordan 312s. I really feel like these didn’t get enough love when they were released. They’re so fun!

My guy Jed shared his pair of New Balance 1906rs from the Tyrese Maxey pack. So icy.

The homie B Mart shared his latest running shoe haul, featuring models from Anta, Li-Ning and Dynafish — all Chinese brands!

Good stuff, y’all.

Thanks for reading, gang!

If you have any questions, comments or concerns, reach out to me via email at michael.sykes@businessoffashion.com or shoot me a message @MikeDSykes via socials.

Peace and love. Be safe, be easy, be kind. We out.

-Sykes 💯