Dive Brief:

• In an open letter to shareholders released Wednesday, Lululemon Athletica founder Chip Wilson called for dramatic changes at the yoga wear retailer’s board, writing "Management competence is uninspiring at best. I am not convinced we have the right leadership in place to catalyze the change necessary to win in the current global, multi-channel and dynamic environment."

• Wilson—who resigned from his Lululemon board post last year but retains a 14.2% stake in the company—characterized the company’s financial performance as “dismal” and noted that Nike and Under Armour are taking market share from the athleisure innovator.

• Lululemon defended its performance in a statement published Wednesday. "As evidenced by our strong operational performance, we have the right board of directors and leadership team in place with the broad and deep expertise necessary to support the execution of our strategic five year plan," Lululemon said, according to CNBC. "This solid foundation gives us the tools to innovate and create as we deliver long-term sustainable growth for all stakeholders."

Dive Insight:

While Wilson seemed to be stepping away from his involvement in the company he founded, in part to concentrate on his wife’s and son’s Kit and Ace enterprise, he’s clearly still greatly concerned with Lululemon’s place in the athleisure segment, coming out swinging in his annual shareholders letter.

Wilson is preoccupied with the rise of Nike and Under Armour, and clearly believes that Lululemon should be more focused on them, too. Lululemon’s shares have fallen about 6% since since Laurent Potdevin arrived as CEO, while shares of Nike and Under Armour have risen 39% and 76% during that time, the Wall Street Journal notes. In addition to those two big players, others—including the likes of Target, Gap’s Athleta and Amazon—have also encroached into the athleisure space.

“Unfortunately, Lululemon has lost its way and I believe a call to action is needed,” Wilson wrote. “I feel strongly that our current Board and management team must clearly articulate and execute a strategy with urgency towards regaining Lululemon’s competitive advantage and profitable growth and they must take responsibility... Since this management has been at the helm, Lululemon has grown revenues by half a billion dollars. Yet net income has declined! Not one incremental dollar of earnings has flowed to the bottom line.”

Wilson also argued that Lululemon should declassify its board, explaining "Shareholders deserve the right to vote on all of the Board members and, if they so choose, make a change. But this is something prevented by our current staggered Board which only allows us to vote on three directors at a time."

Lululemon reported fourth quarter earnings in late March, beating Wall Street estimates thanks to cost cutting and supply chain improvements. Sales grew 17% to $704.3 million in Q4, compared to estimates for sales of $693.1 million. Total comparable sales, including same-store sales and web sales, rose 11% on a constant dollar basis. Fourth quarter same-store sales rose 5% on a constant dollar basis, beating analysts' estimates for a 4.7% rise. Lululemon said it plans to grow revenue more than $4 billion over the next five years and double earnings at the same time.