Lululemon Exploring Sale of Mirror Less Than 3 Years After $500M Acquisition
Lululemon’s deal to buy Mirror in June 2020 hasn’t gone according to plan, with sales of the connected fitness device lagging post-pandemic
Lululemon Athletica could be exiting the hardware space altogether, with the athleisure brand reportedly looking to sell Mirror, the connected fitness device it spent half a billion dollars on in 2020 amid the pandemic.
According to a report from Bloomberg, Lululemon is working with an advisor to solicit interest in Mirror, which has been underperforming over the past couple years as consumer interest in at-home fitness options wanes.
Lululemon acquired Mirror for $500 million in June 2020, when COVID lockdowns were driving up demand for high-tech, at-home fitness offerings. Mirror, a smart device, allows users to perform workouts while receiving on-screen guidance from instructors.
Despite some initial positive signs, the Mirror acquisition hasn’t panned out the way the Vancouver-based athleisure giant would’ve hoped when it made the deal.
By the end of 2021, Lululemon announced it lowered its sales expectations for Mirror, leading shares of the apparel brand to dip.
And while Lululemon as a whole reported positive Q4 earnings for 2022, the outlook for Mirror was a different story. In March, Lululemon CEO Calvin McDonald admitted that sales of the connected fitness device hadn’t met the company’s expectations, including poor results during the holiday season.
“Since our acquisition, the at-home fitness space has been challenging,” McDonald said. “While members love our content, hardware sales did not match our expectations.”
The company took out a $443 million “impairment charge” related to assets and goodwill associated with its Mirror business.
On a March call with investors, McDonald said Lululmeon would be shifting from being focused on hardware to exclusively offering content via a digital and app-based solution.
At that time, at least, McDonald clarified to investors that Lululemon wasn’t eliminating Mirror altogether, but that the company planned to add an app feature to allow guests to sign up, pay a lower monthly fee and access content without purchasing any hardware.
The app is expected to launch this summer at a lower monthly subscription rate.