• by Sarah Mahoney  @mahoney_sarah, September 27, 2023

What do you get when you cross one of the world’s most successful companies with one of the most struggling? While it’s too soon to say what will come of the new Lululemon partnership with Peloton, it almost certainly will keep observers on the edge of their ergonomic stationary bikes.

The agreement makes Peloton the exclusive digital fitness content provider for Lululemon. And it positions Lululemon as the primary athletic apparel partner to Peloton.

“Our brands create transformational experiences, products, and content that build meaningful connections and unlock greater possibilities for our members, anytime, anywhere,” saie Dion Camp Sanders, chief emerging business officer at Peloton, in its statement. “By bringing together the best in fitness content with the best in athletic apparel, we’ll give our communities one-of-a-kind experiences and special content that will inspire them to achieve their goals.”

Lululemon’s near-flawless growth trajectory has had very few hiccups. But one stumble has been connected fitness, with its 2020 acquisition of Mirror, the connected fitness company, for $500 million. (It plans to stop selling those devices this year, although it will still provide support.) And Peloton, which has struggled in recent quarters, losing hundreds of millions and suffering from an embarrassing string of product recalls, has found considerable success in its digital content.

Peloton’s content will begin appearing on Lululemon’s platform early next year. Starting in November, Lululemon Studio All-Access Members can view thousands of Peloton classes for the current price. Peloton content will be updated weekly. And members of Lululemon’s Essential program, which is free and has 13 million members, can also access some Peloton content.

A group of Peloton instructors will become Lululemon ambassadors.

Co-branded apparel will launch next month.

The announcement was enough to boost shares of Peloton by 15%. Despite an aggressive new branding campaign, Peloton last month disappointed observers with weak sales, more losses, declining membership and a disheartening forecast, pushing the once-shining company to its lowest valuations ever.

The two brands have met before -- but in court. Lululemon sued Peloton, saying the fitness company infringed on Lululemon's designs for a handful of sports bras and leggings. The case was settled last year. While Peloton did not admit wrongdoing, it agreed to phase out the items.

Earlier this week, Peloton announced the departure of co-founder Tom Cortese, chief product officer, replacing him with Nick Caldwell, a Silicon Valley veteran.