• by Sarah Mahoney , Yesterday

Lululemon has finally found its next CEO, announcing that Heidi O'Neill -- who began her career at Foote, Cone & Belding before spending 26 years at Nike --  will take over the role in September. The job, which includes a move to Lululemon's hometown of Vancouver, also involves a major leap into troubled waters: Chip Wilson, the brand's founder, is a problem that won't go away. Not only is his vocal unhappiness with the company's performance widely seen as part of the reason the board decided to replace former CEO Calvin McDonald in December, but he continues to agitate for a board shakeup.

And Elliott Investment Management, an activist firm with more than $1 billion in Lululemon, had been pushing for the appointment of Jane Nielsen, former chief financial officer and chief operating officer at Ralph Lauren, according to the Wall Street Journal.

O'Neill is no stranger to shake-ups herself, and departed Nike following a major reorganization after new CEO Elliott Hill took the helm. There are some striking parallels: Both Nike and Lululemon are apparel giants that have lost their edge in North America, with competitors nibbling away at share as consumers look for products with a little more edge.

In its announcement, Lululemon called out O'Neill's more than three decades of experience in performance apparel, footwear, and sport, "with a strong track record of driving disruptive change and growth at scale through product innovation, digital transformation, and powerful brand connection."

During her tenure at Nike, she helped grow the company from a $9 billion business to a $45 billion global leader, playing a key role in product pipeline and brand voice. Before joining Nike, she also worked on the Dockers brand at Levi Strauss & Co.

Meghan Frank and André Maestrini, who have served as interim co-CEOs since Calvin McDonald stepped down in December, will continue to lead until O'Neill joins the company in the fall, when her non-compete agreement with Nike expires.

"O'Neill's hiring comes at a critical time as competition (especially in North America), U.S. tariffs, and merchandising issues have brought lower sales growth and margins," writes David Swartz, an analyst who follows the company for Morningstar, adding that O'Neill will bring "significant relevant sportswear experience."

But he also notes that the hiring is unlikely to smooth things over with Chip Wilson and Elliott Investment Management, noting that Wilson's proxy fight to gain three board seats for his nominees is ongoing.

Neil Saunders, managing director of GlobalData, agrees that activist investors may read the hiring of O'Neill as playing it too safe. “This argument is partly valid as a lot of cultural change is needed at Lululemon in order to improve performance," he writes.

O'Neill's marketing expertise will face some immediate tests. A new Deutsche Bank report analyzing marketing spending across the apparel sector calls out Lululemon for lagging well behind its peer group and flags it as a brand that will likely need to increase marketing investment to remain competitive. The numbers are striking: Lululemon's marketing spend is just 5.6% of sales, the report says, compared to 12.5% for On Running and 10.3% for Nike.

Still, Saunders adds that O'Neill "is her own person who will come with an agenda of change," with a "very strong pedigree in the activewear and sporting space…and strong customer-centric ethos." For a brand that badly needs both, that may be exactly the right résumé.