TORONTO (Reuters) - Canadian athleisure wear maker Lululemon Athletica’s (LULU.O) Chief Executive Laurent Potdevin abruptly resigned on Monday effective immediately, with the company saying that he had fallen short of its “standards of conduct” without offering any details.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct,” the Vancouver-based company said in a statement. It did not elaborate.
Reuters was unable to reach Potdevin for comment.
Lululemon said in the statement that Chairman Glenn Murphy would become executive chairman, with three senior executives taking on expanded duties and reporting to him. It also reaffirmed its updated guidance for the fourth quarter of 2017 for revenue of $905 million to $915 million.
Lululemon said separately in an exchange filing that it had agreed to pay Potdevin a total of $5 million in exchange for his agreeing to certain terms including a covenant not to sue the company.
The company’s shares lost 3.5 percent to $74.71 in after hours trade.
“Today’s announcement is vague and damaging,” Neil Saunders, managing director of GlobalData Retail, said in an emailed statement. “As a company that prides itself on transparency and openness, we would expect it to have an honest conversation with stakeholders.”
Potdevin became CEO in January 2014, taking over from Christine Day who led the company during its transition from a niche yoga-wear maker to broader multi-sport appeal. He was previously president of the footwear brand TOM shoes.
A person familiar with the matter told Reuters that Potdevin’s resignation was not related to any single action or event. The person was not authorized to speak publicly about the matter and request anonymity.
The company posted a 14 percent increase in sales in the quarter ended Oct. 29.
Potdevin had said he wanted the company to increase revenue by more than 40 percent to $4 billion by 2020. The company said in its statement on Monday that its strategies to achieve that were still on track.
Reporting By Nichola Saminather; Editing by Denny Thomas