Activist hedge fund Elliott Investment Management, known for its aggressive strategies, has built a stake exceeding $1 billion in Lululemon Athletica (LULU.US). Sources indicate that Elliott is recommending potential CEO candidates to the struggling athletic apparel retailer, with retail veteran Jane Nielsen—former CFO and COO of Ralph Lauren—identified as a suitable candidate.

Lululemon’s shares have rebounded since last Friday when the yoga-wear maker raised its full-year outlook and announced the departure of CEO Calvin McDonald, who will step down by the end of January. The company is currently searching for his successor.

Analysts note that the Vancouver-based company’s growth has slowed in recent quarters, with expectations that this trend will persist. Lululemon faces intensifying competition from emerging brands like Alo Yoga and Vuori, as well as pressure from low-cost imitations, with sales growth nearing its lowest level since its 2007 IPO.

Year-to-date, Lululemon’s stock has declined 46%. On Wednesday, shares rose 0.6% to $207.87 in New York trading, giving the company a market capitalization of $24 billion.