Lululemon buys fitness company Mirror for $500 million
Yoga-pants retailer Lululemon Athletica Inc. agreed to buy Mirror, a maker of in-home fitness equipment, for $500 million, broadening a partnership that began last year as exercise increasingly moves away from traditional gyms.
Mirror will operate as a standalone company within Lululemon and retain its chief executive following completion of the deal, the companies said Monday in a statement. The purchase will be paid from Lululemon’s primary sources of liquidity, including $800 million in cash and $700 million in credit facilities.
The deal furthers Lululemon’s shift to become a more experience-based company and beyond its roots as a traditional retailer. While the Vancouver-based 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.
Home-fitness products such as Peloton bikes and Mirror’s wall-mounted device have gained in popularity as the coronavirus pandemic has shuttered gyms. New York-based Mirror, known for its ubiquitous subway ads, also offers customers live classes and on-demand workouts, mimicking what they might have once paid a personal trainer at the gym to oversee.
The deal is expected to close in the second quarter of the fiscal year. Lululemon took a small stake in Mirror last year.
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.
Mirror’s trademark product, which looks like a standard full-length mirror when not in use, retails for $1,495. Shoppers can also pay in $42 a month installments.