Commentary

Lululemon Bulks Up With Purchase Of Tech Home Fitness Company Mirror


Lululemon is buying Mirror, the home exercise company that streams live classes and on-demand sessions from kickboxing to meditation to kettlebell on a $1,500 reflective display, for $500 million.

“Lululemon, known for pricey yoga pants, sees Mirror as a way to bolster revenue while also providing another avenue to market its products, CEO Calvin McDonald said in a call with investors. Mirror instructors, for instance, will wear Lululemon products,” Sharon Terlep writes  for The Wall Street Journal.

“Much like Peloton Interactive Inc.’s stationary bicycles, Mirror users can tune into live yoga and fitness classes and see on-screen metrics about their performance. They also can receive personalized training with instructors for extra fees. Shares of Peloton have more than doubled so far this year,” Terlep adds.

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“The deal furthers Lululemon’s shift to become a more experience-based company and beyond its roots as a traditional retailer. While the company has always leaned into health -- with many of its existing stores offering free running clubs or yoga classes -- last summer it moved to monetize its workout offerings by opening a Chicago store with a gym,” writes  Bloomberg’s Rick Clough.

“Lululemon chief executive officer Calvin McDonald said on CNBC that the acquisition was not motivated by boosting his company’s apparel sales but by the home gym product’s own potential. He said Mirror will be profitable as soon as next year and while it’s currently only available in the U.S., Lululemon plans to offer Mirror internationally,” Clough adds.

“In a conversation shortly before at-home fitness company Peloton went public last fall, Mirror founder and CEO Brynn Putnam told CNN Business her company is taking a “different approach than the competition,” writes  Sara Ashley O’Brien for CNN Business.

“Putnam explained that she’s building a product that can flex as trends change. Mirror wants to be ‘the third screen in your life,’ she said at the time. In other words, it's more about the ability to connect with consumers in their homes with ease than it is about the particular application,” O’Brien continues.

“Putnam came up with the idea for Mirror after she struggled to fit workout classes into her schedule as a pregnant entrepreneur. Simultaneously, she noticed how much customers at Refine Method loved working out alongside mirrors. She sought to blend the two concepts,” O’Brien adds.

It’s proving to be a fortuitous insight.

“The deal comes at a time when home workout solutions are in high demand. The COVID-19 pandemic has severely limited workout options for many across the world, and the continued closure of gyms has prolonged the problem. Even when they begin to reopen in different locales, it seems many will be wary of returning to a potentially high-risk enclosed space, so long as the virus continues to spread,” TechCrunch’s Brian Heater writes  for Yahoo News.

“Lululemon, which is based in Vancouver, British Columbia, said it would promote Mirror online and sell its exercise machine in ‘a number of locations.’ Mirror has only two physical locations. It has built a popular following online, including among celebrities like Reese Witherspoon, Alicia Keys and Ellen DeGeneres. Its classes include Pilates, barre, kickboxing and strength training,” Sapna Maheshwari writes  for The New York Times.

“The acquisition will also expand a ‘content creation partnership’  between Mirror and Lululemon. Classes like meditation that are taught by Lululemon’s ‘global ambassadors’ are already available on the Mirror platform. (A key part of Lululemon’s marketing strategy has long been to team up with people like athletes and yogis to promote its brand.),” Maheshwari continues.

Following completion of the transaction, which is expected to close in the second quarter of fiscal 2020, New York City-based Mirror will operate as a standalone company within Lululemon. Putnam will continue as Mirror’s chief executive officer, reporting to McDonald, according to the news release announcing the deal. 

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