Activist investor Elliott Investment Management has built a stake of more than $1 billion in Lululemon Athletica and is bringing a potential CEO candidate to the table, a person familiar with the matter told CNBC.

Lululemon’s stock rose 6% in early trading Thursday.

Last week, Lululemon announced CEO Calvin McDonald would step down effective Jan. 31, following a year-long performance slump for Lululemon.

Elliott has been working with former Ralph Lauren CFO and COO Jane Nielsen as a potential candidate, according to the person, who spoke on the condition of anonymity about confidential matters.

In a news release announcing McDonald’s departure, the company said its board of directors was working with a “leading executive search firm” to find its next CEO. The leadership change came as Lululemon’s founder Chip Wilson has been calling on the company to make a change, saying earlier this year that the company’s performance is “in a nosedive.”

The athletic apparel company has been facing an increasingly crowded landscape, with athleisure entrants like Vuori and Alo Yoga.

Nielsen served at Ralph Lauren from 2016 until April. Before that, she held roles at Coach and PepsiCo.

Elliott has taken a stake in a slate of other companies as well this year, including a more than $2 billion stake in Workday and a $4 billion stake in PepsiCo. The Wall Street Journal earlier reported Elliott’s Lululemon stake.