The athleisure company acquired Mirror for $500 million in June 2020 amid the at-home fitness boom, but the deal has proved to be a flop
Lululemon is reportedly having trouble finding a buyer for its connected fitness Mirror.
The athleisure company is eager to get rid of Mirror, choosing to sell the connected fitness hardware despite a challenging period for asset valuations, according to a report by the New York Post.
While the Vancouver-based athleisure company acquired Mirror for $500 million in June 2020 hoping to capitalize on the at-home fitness boom, financial filings reveal Lululemon now values Mirror at just $57 million.
Despite that, Lululemon hasn’t been able to find a buyer for its connected fitness product, the Post reports.
Connected fitness fades
Unfortunately for Lululemon, while Mirror initially showed some positive signs, by the close of 2021, the company lowered sales expectations for the product that it expected would become a must-have for at-home fitness enthusiasts.
Whether fitness consumers grew bored with connected fitness hardware or simply were eager to return to the gym, Lululemon’s Mirror seems stuck on the runway, never taking off with consumers. It could also be the result of Peloton fatigue, as some consumers, realizing that their high-priced hardware was simply collecting dust, grew wary of purchasing another piece of equipment.
Despite positive Q4 earnings across the entire company, Lululemon CEO Calvin McDonald admitted that Mirror didn’t meet the athleisure giant’s expectations and had lackluster results during the holidays. McDonald acknowledged that the at-home fitness space had been challenging since Lululemon’s acquisition of Mirror, likely due to the pandemic beginning to wane, restrictions lifting and fitness consumers eager to return to in-person fitness.
Earlier this year, rumors swirled that Lululemon was shopping its connected fitness device, and Bloomberg reported that the company was working with an advisor to solicit interest. One potential buyer that Lululemon reportedly tried to woo was connected fitness rowing company Hydrow. However, a deal never came to fruition.
Content is king
Like Peloton, Lululemon is moving away from a hardware-centric model, deciding to shift away from Mirror to Lululemon Studio, a new $12.99-a-month digital app. The digital model allows members to experience fitness content without needing to purchase hardware, which the company says will expand its TAM.
While Lululemon may have missed the boat on the at-home fitness craze, the company seemed intent on quickly transitioning to an app-based fitness model.
“We view Lululemon Studio in the same way we view any innovation,” McDonald told investors in March. “We test, we learn and we evolve as necessary. Although the acquisition has not fully materialized as originally intended, we’re in a much better position in our understanding of the community and our new membership program as a result.”
Courtney Rehfeldt has worked in the broadcasting media industry since 2007 and has freelanced since 2012. Her work has been featured in Age of Awareness, Times Beacon Record, The New York Times, and she has an upcoming piece in Slate. She studied yoga & meditation under Beryl Bender Birch at The Hard & The Soft Yoga Institute. She enjoys hiking, being outdoors, and is an avid reader. Courtney has a BA in Media & Communications studies.