TORONTO ­— Lululemon founder Chip Wilson is once again offering unsolicited public advice to the yogawear retailer he created but no longer runs, urging executives to buy rival Under Armour in one of his favourite forums: a bus shelter located conveniently outside of Lululemon’s Vancouver headquarters.

A large ad placed at the Cornwall Ave. bus stop on Friday features the all-caps headline “LULULEMON BUY UNDER ARMOUR NOW!”

What follows is Wilson’s argument that now is the perfect time for the high-end athleticwear retailer to take advantage of Under Armour’s enfeebled state.

Handout
HandoutAn advertisement seen at a bus stop in Vancouver.

“Lululemon’s business model is to have no debt and $1 billion in the bank and to be ready for an extraordinary opportunity,” reads the ad adjacent to Lululemon’s office building. “Under Armour is now weak. They have junk bond debt, too much inventory and technology purchases they cannot monetize.”

The message concludes: “BUY Under Armour and bring it our original culture and ‘money making’ business model.”

Wilson’s name is at the bottom of the ad, as well as the URL elevatelululemon.com, a website he launched last year to weigh in on Lululemon’s current performance.

Wilson’s latest public edict aimed at Lululemon brass signals his continued interest in the company even as he devotes time to Kit & Ace, an apparel startup co-founded by his wife Shannon and son J.J. in 2014. Wilson, who founded Lululemon in 1998, has criticized the retailer’s management multiple times before and after he resigned from the company’s board in early 2015 after a high-profile spat with its directors.

Last June, he wrote an open letter to shareholders after Lululemon denied his request to speak at the company’s annual meeting. In it, Wilson claimed the company was losing ground to Under Armour and Nike.

“Three years ago our stock was double the value of Under Armour’s,” he argued in the June 2016 missive. “Now it is worth less than half.” That month, he told Business Insider that he had made “all of (his) money in the past two years betting on Nike and Under Armour stock.”

But now, just a couple of quarters later, Wilson has changed his tune. Lululemon’s shares are trading at more than three times’ the price of Under Armour’s stock after the latter reported weak fourth-quarter results last month and scaled back on the pace of its sales growth projections.

Under Armour’s shares have plunged 30 per cent in the last month, and its market cap is now at US$9.2 billion, slightly trailing Lululemon’s US$9.25 billion market cap.

In the meantime, Kit & Ace has been trying to find its footing in the competitive apparel landscape. The retailer laid off roughly 20 per cent of its head office staff in Vancouver last fall on top of a 10 per cent head office cut a year ago, and curbed its store expansion plans.

Wilson did not respond to an email query about the new ad on Friday.

Financial Post

hshaw@nationalpost.com

Twitter.com/HollieKShaw