In 2023, The New York Times declared “soft pants” as a post-pandemic trend, but Lululemon’s $148 fleece-lined pleated trousers are now losing popularity. Elliott Investment Management bought a $1 billion stake in Lululemon as CEO Calvin McDonald steps down, signaling a need for a new direction.

Lululemon’s revenue has tripled under McDonald, but growth is slowing with a 5% sales drop in the Americas. Founder Chip Wilson criticizes the brand for stocking discounted clothes and losing its premium image. Elliott is considering former Ralph Lauren executive Jane Nielsen as the new CEO.

Lululemon’s shares are down 40% this year, prompting Elliott’s interest. The firm has a history of influencing top leadership in consumer companies like Starbucks and PepsiCo. Elliott’s stake in Lululemon signals a potential turnaround for the struggling brand.

Read more at Yahoo Finance: Elliott Takes $1 Billion Stake in Lululemon, Swaying CEO Search