Lululemon (NASDAQ: LULU), the athletic apparel retailer, announced Monday it bought the in-home fitness company Mirror for a total of USD500 Million. In the midst of the coronavirus pandemic, going to the gym hasn’t been an option for many and Lululemon is betting on the transition to at home workouts. The company’s shares rose 4% Monday.
The acquisition of Mirror helps “accelerate the growth of personalized in-home fitness.” Meanwhile Mirror will function as it’s own company and will maintain Brynn Putnam as CEO.
In 2019 Lululemon invested USD1 Million into Mirror which had recently opened in 2018. The at-home workout company managed to raise USD72 Million from investors. The deal with Lululemon and Mirror will be paid in cash and is anticipated to close during the second quarter of 2020.
Peloton disclosed its earnings in May where sales had skyrocketed 66% compared to the prior year. Additionally it saw its subscribers rise 94% year over year.
Lululemon revealed in 2019 its overall plan to not just sell sports wear but as a brand encourage people to sweat more.
“The acquisition of Mirror is an exciting opportunity to build upon that vision,” Lululemon Chief Executive Calvin McDonald said Monday. He also said that Mirror will bring in over USD100 Million in revenue this year and will possibly be profitable by 2021.
“In itself it is a revenue business … and we know that we can continue to grow that,” McDonald expressed while in an interview with CNBC’s Sara Eisen. “We see an entirely new model for incremental business.”
Lululemon shares have risen 26% throughout the year.