Lululemon strikes deal to acquire home fitness company Mirror
Lululemon Athletica Inc. said on Monday that it has struck a deal to acquire in-home fitness company Mirror.
The $500 million acquisition will allow the Vancouver-based athleticwear brand to deliver an interactive workout platform that features live and on-demand classes to new and existing Lululemon customers.
The brand, which launched in 2018, offers weekly live classes and thousands of on-demand workouts, as well as immersive one-on-one personal training.
Lululemon believes the acquisition will position the brand to drive its business through omni-guest experiences, including digital offerings like personalized in-home workouts.
“In 2019, we detailed our vision to be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect. The acquisition of Mirror is an exciting opportunity to build upon that vision, enhance our digital and interactive capabilities, and deepen our roots in the sweatlife,” said CEO Calvin McDonald, in a news statement.
“We look forward to learning from and working with Brynn Putnam and the team at Mirror to accelerate the growth of personalized in-home fitness.”
The purchase price is expected to be paid from the company’s primary sources of liquidity, which include over $800 million in cash, its existing $400 million revolving credit facility, and a new one-year $300 million revolving credit facility.
Lululemon initially invested in Mirror last year, in a deal that also included a content partnership.
Lululemon’s digital direct-to-consumer segment was a bright spot in its last quarter, posting a 68 percent sales increase (70 percent in constant dollars) and representing 54 percent of total net revenue, compared to only 26.8 percent in the same period in the previous year.
While the company has seen a peak in online sales, it was not enough to make up for the negative impact of the Covid-19 crisis last quarter.
For the first quarter ended May 3, 2020, the company reported total net revenue of $652 million, a 17 percent decrease compared to $782.3 million in the prior-year period. In constant dollars, the decline was 16%.
Wall Street analysts polled by FactSet and cited by MarketWatch had expected the company to report sales of $692 million.
Following completion of the transaction, Mirror will operate as a standalone company within Lululemon and Putnam will continue as Mirror’s chief executive officer, reporting to McDonald.
Copyright © 2020 FashionNetwork.com All rights reserved.