As interest for at-home fitness rises due to the coronavirus pandemic, Mirror is predicted to generate $700 million in revenue and more than half a million subscribers by 2023.
Market Watch reports that the acquisition of Mirror for $500 million was announced on June 29 by Lululemon’s chief executive, Calvin McDondald. Accordingly, ” the deal will be financed with the company’s $1.5 billion in liquidity, with the transaction expected to close in a week or two.”
Following a reported first-quarter 17% decline in Lululemon’s sale, due to its stores being temporarily shut due to the pandemic, the outlet brand seems poised to bounce back due to this new acquisition which is said to make perfect sense.
A look in the Mirror
The Motley Fool says that Mirror specializes in creating digital workout displays which it then sells through its website for US$1,495[AU$2,137]. There is plenty of competition as it operates in the same fitness space as Peloton Interactive.
The interactive workout platform looks like a mirror when not in use, but it becomes a screen showing fitness classes and more when activated. On top of the $1,495 purchase, it has a subscription of $39 per month.
Despite the acquisition by Lululemon, Mirror is set to remain operational as a stand-alone company. This decision is likely due to the fitness brand’s founder, Brynn Putnam, who was a former Lululemon ambassador, who started the company two years ago.
Both Lululemon and Mirror were said to have collaborated on content in 2019 after an initial investment on Lululemon’s part. Since then, several Lululemon ambassadors launched content on Mirror, cementing that it was the natural progression of that original collaboration.
What’s next for Lululemon?
Lululemon is reported to be investing in its digital capabilities. Prior to the coronavirus pandemic, 64% of the company’s digital users were stated to be using a home workout.
75% are currently using an item from the brand, while 86% of those owning home equipment saying they will be using Lululemon with the same frequency or more moving forward.
CNBC reports that CEO Calvin McDonald said in a statement, “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.”
With the help of Lululemon’s marketing muscle, Mirror is poised to grow further and help to build the ultimate lifestyle brand. Adding to it is a growing stream of subscription revenue from Lululemon’s business, making its growth stock more than just an apparel store further down the line.