Lululemon Founder Chip Wilson Secures Over $500 Million in Loans Backed by Shares

Lululemon founder Chip Wilson has pledged shares in return for cash for the third time in a year, giving him access to over $500 million from different banks. The arrangements allow him to maintain his voting influence over the yogawear-maker and benefit from any potential share price rebound. Wilson plans to use the funds for personal expenses and potentially invest in disease research.

Lululemon Athletica Inc. founder Chip Wilson has secured over $500 million in loans by pledging shares, allowing him to maintain his voting influence over the yogawear-maker and potentially benefit from any share price rebound. This is the third time Wilson has taken such an arrangement within the past year [1].

The loans come from three different banks: Royal Bank of Canada, Citigroup Inc., and Goldman Sachs Group Inc. [1]. Royal Bank of Canada agreed to lend Wilson up to $315 million, backed by Lululemon shares and other unspecified collateral. Citigroup Inc. committed to advance Wilson about $122 million, which he can either settle in shares or cash. Goldman Sachs Group Inc. agreed to lend him up to $200 million, also backed by Lululemon stock [1].

Wilson's deals allow him to avoid selling shares, which could result in capital gains tax. Instead, he can benefit from any potential share price increase. Lululemon's stock has seen significant fluctuations, surging during the pandemic but tumbling more than 40% this year due to slowing sales and fewer store visitors [1].

The billionaire, who suffers from a form of muscular dystrophy, plans to use the funds for personal expenses and potentially invest in disease research. He has previously stated that he would spend $100 million on research and has undergone experimental therapy to slow the progression of his disease [1].

Each of the three arrangements is structured differently, with varying terms and conditions. The margin loan from Goldman is backed solely by Lululemon shares, while the loan from RBC is secured with both Lululemon stock and other unspecified collateral. The Citigroup deal allows Wilson to sell shares outright or collect the loan balance and repay it later using cash or shares [1].

The regulatory filings also disclose that Wilson terminated two old share-backed loans that gave him access to more than $100 million. These filings do not reveal whether he has taken advantage of the loans or how he plans to spend the cash [1].

Wilson's ability to secure such large loans indicates the trust and confidence that financial institutions have in his ability to repay the debts and maintain his voting influence over Lululemon. This move also underscores the flexibility and effectiveness of using publicly traded equity as collateral for loans, a strategy often employed by super-rich individuals [1].

References:
[1] https://www.bloomberg.com/news/articles/2025-08-19/lululemon-billionaire-pledges-stock-for-500-million-in-loans