Lululemon founder believes the company 'has lost its way'

London - Dennis 'Chip' Wilson, founder of Lululemon Athletica is not pleased with the path the sporting goods company has taken, stating that it "has lost its way" and needs "a call to action."

In an open letter penned to company shareholders on Wednesday, Wilson voiced his growing concerns for the direction the brand he founded in 1998 is going in. Last year saw Wilson resign from the company board, retaining a 14.2 percent stake in Lululemon as the company's largest shareholder. He notes that he previously asked the board of directors permission to speak to the shareholders at this year's annual general meeting, but was "denied that opportunity."

Chip Wilson says Lululemon has "lost its way"

"Had I been given the opportunity, this is what I would have said: I love lululemon and its employees and remain its biggest believer and supporter," wrote Wilson in his heartfelt letter. "No one is more aligned and focused on shareholder value creation. I am confident that with the right management, Board stewardship and capable execution, lululemon can return to greatness and all shareholders will see exponential returns."

"Unfortunately, lululemon has lost its way and I believe a call to action is needed. 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," he added.

Over the years the Canadian company has become well known for its yoga pants and tops. Wilson stressed that Lululemon was the brand which created the highly popular global athleisure market, but adds that the company can no longer "continue to cede the market opportunity we created to Under Armour and Nike." His comment refers back to an announcement made by Under Armour's CEO Kevin Plank in January, which detailed plans for the company's women's wear business to double - a move which could pose a big threat to Lululemon.

The billionaire founder highlights how three years ago, Lululemon's stock was double the value of Under Armour's - now it is worth less than half. He adds that since the current management was appointed in December 2013, Lululemon stock has dramatically under-performed within the market compared to its peers Under Armour and Nike. "Under Armour has taken our leadership role, and the market recognizes this with a premium valuation," he wrote.

Chip Wilson sounds the alarm for a "call to action" for Lululemon

He also questions the Lululemon board of directors, asking them if they indeed plan on taking back their original leadership position, "in a market we invented and built" and what signs would indicate that they are and if the if board would voluntarily move to declassify the board, so shareholder can vote for a new slate next year.

"In closing, as a long-term investor in lululemon, I am uncomfortable with the lack of urgency, stewardship and performance of our great company," concluded Wilson. "I have not heard a strategy nor seen actions that lead me to believe we will regain our competitive position and secure long-term returns. This is unacceptable and the Board needs to understand that I – indeed all shareholders – will be watching closely."

Lululemon Athletica has responded to Wilson's letter in a statement following its annual shareholder meeting on Thursday, highlighting that it has "the right" board members and leadership in place. "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."

The company reported a 15 percent increase in revenue and a 11 percent growth in profit for the year ending January 31, 2016 in comparison to the previous year. Lululemon is set to publish it financial results for its first quarter on June 8.

Photos: Lululemon Athletica, Facebook