Lululemon Athletica (NASDAQ:LULU) announced on Tuesday the implementation of a new integrated design structure and the departure of Chief Product Officer Sun Choe.
Per the announcement, Choe resigned to pursue another opportunity and will leave the company later this month.
The company’s shares fell 4.6% in premarket trading Wednesday.
Lululemon said it does not plan to fill the chief product officer role
Jonathan Cheung, the global creative director, will now oversee product design and innovation, while continuing to manage design, innovation, and product development. Cheung will report directly to Lululemon CEO Calvin McDonald.
Moreover, Lululemon said it is establishing a new team comprising leaders from its Merchandising and Brand functions, in a bid to improve global and regional go-to-market strategies.
Commenting on the development, Jefferies analysts said Choe’s departure “is not a good sign” for the company.
Furthermore, analysts said their recent visits to Lululemon stores have pointed to “several issues with the company's assortment, and we believe these adjustments could suggest weaker top-line results over the coming quarters.”
“Therefore, we continue to expect shares to underperform, as we believe business performance has peaked and competition is rising,” analysts added.