Lululemon, the darling of the athleisure world, has announced that it will acquire the stay-at-home fitness company Mirror for US$500 million. It marks the brand’s first acquisition, and is yet another sign that the future of fitness remains at home as the world continues to battle the coronavirus crisis.
The popular upmarket athleisure brand announced on Monday (June 29) that it has closed a deal to buy Mirror, an in-home connected fitness platform. The US$500 million purchase will be made in cash, and is expected to close in the second fiscal quarter of this year.
Mirror’s founder and CEO, Brynn Putnam, will continue to act in her position to run the brand as a standalone company, and will report to Calvin McDonald, the CEO of Lululemon.
Lululemon made its first US$1 million investment into the New York-based workout startup in 2019. To date, Mirror has raised over US$74 million in funding, as investors place their bets on its livestream and on-demand home workout system, which connects users through a sleek wall-mounted responsive display.
Each Mirror retails for US$1,495 and its subscribers pay a monthly fee of US$39 to stream its weekly classes, and is rivalling against other tech-forward home workout platforms such as Peloton.
Speaking to CNBC about the acquisition, McDonald said that “in itself it is a revenue business” that Lululemon plans to continue to grow, adding that Mirror expects to rake in more than US$100 million in revenue this year to break even by 2021.
Mirror, Peloton and other stay-at-home workout platforms have seen their sales surge during the coronavirus pandemic, which has forced fitness studios to close and millions of people around the world in search for alternative ways to exercise during lockdown.
In an earnings report released in May, Peloton reported that its latest quarter sales had surged a whopping 66% compared to the same period last year to reach US$524 million. Its connected subscriber base has ballooned to nearly 900,000 people, marking a 94% year-on-year rise.
Amid the home exercise trend, money has been pouring into such platforms with investors confident that it will continue to last even when quarantine is over. NEOU, the startup that describes its app as the “Netflix of fitness”, recently raised US$5 million from big Wall Street names including CEO of asset management firm Ares Management Mike Arougheti and president of Vista Credit Partners David Flannery.
In China, the home exercise app Keep recently secured a whopping US$80 million in its latest Series E round, which lifted the startup to unicorn status. According to a report from research firm iResearch, China’s overall fitness app market saw user figures spike 12% year-on-year within the first quarter of 2020.
But even before the pandemic struck, investors had already eyed the at-home fitness platform industry as a business opportunity not to be missed. In January, ClassPass announced that it closed a Series E round with an astonishing US$285 million, which elevated it to unicorn status as well.
Lead image courtesy of Mirror.