Lululemon's CEO Search: Should Troubled Yoga Company Seek A Steve Jobs Or A Tim Cook?

It’s been ten days since Lululemon CEO Christine Day stunned Wall Street by announcing her resignation from the helm of the yoga-wear giant. The Canadian company’s stock has yet to recover: it hovers in the $62-$63 range, down from a 52-week high of $82.50.

The official word from Lululemon is that Day is leaving voluntarily, rather than as a result of an embarrassing recall of black yoga pants in March when they were discovered to be too sheer.

Investors can probably expect the stock to rebound once a successor is announced and a leadership transition begins. How long that’ll take is anyone’s guess: the quirky clothier has remained mum on the search, saying only that Day will remain in place until a new CEO is appointed. (The firm did, however, find time to post a spoof job ad on their site, seeking applicants able to “hold a handstand for at least 10 minutes” among other “cheeky”criteria; it’s since been taken down.)

While this search takes place, experts believe it’s time for the company to decide whether they need a proven merchant like Day or a visionary like Chip Wilson, the company’s billionaire founder and current chairman. Day had been responsible for both operations and innovations since Wilson relinquished his executive role in early 2012.

Day has a reputation as an operations guru, with 20 years at Starbucks SBUX -0.84% under her belt before she started at Lululemon in 2008. Wilson, on the other hand, is a former surfer responsible for his yoga brand’s “manifesto”, including such gems as “dance, floss, sing and travel,” and “stress is related to 99% of all illnesses.”

“They need to make a choice: a CEO who oversees growth and international expansion, or someone motivational, who buys into what has been called a cult-like following,” said Erich Joachimsthaler, president of brand strategy firm Vivaldi Partners Group. “These are categorically opposite people.”

Joachimsthaler likened the two to eccentric Apple AAPL -0.8% co-founder Steve Jobs and more straight-laced current CEO Tim Cook. “One was fanatical and maniacal, while the other was running the company and optimizing the supply chain,” he said. “You need two people.”

Brian Kropp, managing director of leadership advisory firm CEB, favors the Tim Cook option: someone who appreciates idiosyncratic corporate culture without appearing to buy into it. “A company like Lululemon might be expected to seek a charismatic leader or a turnaround artist,” he said. “The person doesn’t have to be steeped in the historical or cultural component. But they must understand the context. It’s like the Tai Chi of things: absorb the culture, and reflect or direct it without stopping.”

While Chip Wilson remains the company’s largest individual shareholder and chairs the board, it’s considered unlikely he’ll step back into an executive role. Lululemon hasn’t said whether they’ll look to appoint a replacement for Wilson as head of innovations rather than allow a new CEO to tackle its founder’s former role.

The yoga brand has, however, confirmed its active search for a head of product operations, as Day referred to the role in June’s Q1 earnings call, as well as a vice president of design and merchandizing. One of these executives will fill a hole vacated by Sheree Waterson, who was fired over the see-through black pants fiasco.

Brian Kropp was surprised to learn there were so many senior vacancies at a company of Lululemon’s size (not to mention $9 billion market cap). “To avoid situations like this they have to internally groom their next set of leaders,” he said, adding that they should have two or three potential future CEOs on their “executive bench” at all times. He believes, though, that the stock market will react favorably once a new leader is chosen.

“The vast majority of stock market movement is smoke and excitement,” he said. “It’s a gut reaction. Regardless of a pop or drop, it’s always very, very short term.”

Forbes.com