Lululemon to acquire start-up for $500 million
Lululemon athletica inc. is making a major play in the fast-growing area of personalized at-home fitness.
The fitness apparel retailer has agreed to acquire an-home fitness start-up Mirror for $500 million. Launched in 2018, Mirror is an interactive workout platform that offers weekly live classes and thousands of on-demand workouts as well as one-on-one personal training.
The deal comes as gyms in many parts of the country remain closed due to the COVID-19 pandemic and at-home workout solutions are seeing a surge in demand.
The transaction also builds on a partnership between the two companies, which began in mid-2019 with an initial investment in Mirror by lululemon, and which also includes a content partnership that brought exercise and meditation classes to the Mirror platform by lululemon’s “global ambassadors.”
The acquisition will further expand the content creation partnership between the two brands and will help each reach new customers.
“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,” said Lululemon CEO Calvin McDonald. “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.”
The deal is expected to close in the second quarter of fiscal 2020. Upon completion, Mirror will run as a standalone company within Lululemon. Brynn Putnam, Mirror’s founder and CEO, will remain as chief executive, reporting to McDonald.
“As part of lululemon, Mirror can further strengthen its position and accelerate its growth by leveraging lululemon’s deep relationships with its guests, ambassadors, and communities, as well as the company’s infrastructure, including its store network and e-commerce channels, to acquire new users,” said Putnam.
The purchase price is expected to be paid from Lululemon’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.