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Good morning, Broadsheet readers! Regulators fine Citibank $135.6 million in blow to CEO Jane Fraser, a female-founded DNA company becomes a unicorn, and the founder of Beyond Yoga gives her first exit interview after Levi Strauss.
– Exit interview. Michelle Wahler just dropped off her kid at college. At least that’s how she describes the decision to step back from her company, Beyond Yoga, after 18 years of running the business.
Wahler joined the brand’s first founder, Jodi Guber Brufsky, to bring a vision for size-inclusive activewear to life in 2005 and sold the brand to Levi Strauss in a buzzy acquisition in 2021. The $400 million deal was the $6.2 billion denim-maker’s entry into the activewear category and a way to reach more female shoppers. Wahler stayed with the brand through the acquisition and stepped down in early 2024; her successor is Nancy Green, the former CEO of Athleta.
“It’s different than I expected. And it’s been more emotional than I expected,” she says of her decision to leave the business in her first interview since stepping down. “The first few days, I just kept checking my email. It was very shocking to me that nobody was reaching out to me—that was a huge shift. I think I had this vision that even though I was passing the baton, I’d be showing up the next day, bringing coffee and doughnuts to everybody. I realized that I needed to give everybody, myself included, a moment to have some separation, for them to bond with their new leader.”
Michelle Wahler, cofounder of Beyond Yoga.Courtesy of Beyond Yoga The college analogy is one she comes back to. “Decisions are being made right now that impact my baby,” she says. “You hope they’re making the right decisions, and they might be different than the decisions you would make. But you hope they’re making smart, healthy choices.”
Under the Levi’s parent company, Beyond Yoga grew to $100 million in revenue and opened brick-and-mortar stores for the first time. The L.A.-based team thought creatively, using its yoga pants’ signature fabric for fitting room curtains, so customers would have to touch the material no matter what product they were trying on.
The acquisition has been seen as a success story. For Wahler, it came out of nowhere; she got a cold LinkedIn message from a Levi’s executive and initially though Levi’s was interested in some sort of brand collaboration. “I really was not planning on selling the company,” Wahler remembers.
Today, Wahler advises founders to think long and hard before agreeing to a sale—and to know their value. “You will probably only get one good bite at the apple,” she says. “So make sure that it is rewarding—because it’s hard to give up your business and that control. Make sure that it’s worth it.”
Emma Hinchliffe
emma.hinchliffe@fortune.com
Change the World is Fortune’s annual list featuring companies that are doing well by doing good. These companies are using the creative tools of business to help the planet and tackle society’s unmet needs—and they’re earning a profit while doing so. Who do you think makes the cut? You can nominate potential honorees here or check out last year’s list here. The deadline for applications this year is Monday, July 29, and the list will be published in late September.
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- Banking on it. Federal regulators fined Citibank $135.6 million on Wednesday for failing to sufficiently alleviate risk and internal issues. The fine is a blow to CEO Jane Fraser, who has made it her mission to simplify and rejuvenate the struggling institution. Fortune
- Unicorn spotted. Element Biosciences, run by founder and CEO Molly He, has raised $277 million in Series D funding to continue expanding its DNA sequencing platform. The funding values the San Diego-based company, which He says is designed to make precision medicine more accessible, at $1.03 billion. Forbes
- Speak to the manager. The Federal Trade Commission, led by Chair Lina Khan, is planning to sue CVS Caremark, Express Scripts, and OptumRX, the three biggest pharmacy benefit managers, for allegedly directing patients to prescription drugs with inflated prices, per CNBC. In statements, CVS Caremark said it is “proud of the work we have done to make insulin more affordable for all Americans with diabetes,” Express Scripts claimed that “prices of insulin and other medicines are set by their manufacturers,” and OptumRX has yet to comment.
- No care, no cash. The Biden administration has proposed new measures that would require that hospitals hold maternal health training for staff and take up other maternal safety measures. The rule would apply to hospitals enrolled in Medicare and Medicaid programs; violators could lose federal funding. Axios
- Dating wars. Tinder and Bumble are struggling to keep up with the user growth of competitor Hinge and the stock hype of LGBTQ+ dating app Grindr. Experts attribute the slumps of Tinder and Bumble, both run by women, to the death of hookup culture and Bumble’s troubled rebrand this year. Quartz
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