Lululemon plans to sell the mirror to Hydrow
lululemon CNBC is looking to sell its Mirror home fitness business and has approached rival Hydrow as a potential buyer.
Several parties have contacted Hydrow to gauge its interest in Mirror, said industry sources, who declined to be named because the talks are private.
It’s unclear whether Hydrow, a private start-up that sells connected rowers, wants to move forward with the deal. The company declined to comment.
A spokesperson for Lululemon said they “do not comment on rumors or speculation.”
“As previously announced, we are shifting the focus of lululemon Studio from a hardware-centric offering to an offering that will also focus on app-based digital services in the future,” the spokesperson said. “This work continues, and our strategy is to create long-term value and build a larger community of guests who have a deeper connection with Lululemon.”
At the height of the home fitness bonanza, Lululemon announced in June 2020 that it would buy Mirror for $500 million. It was assumed that people would continue to exercise at home after the end of the Covid pandemic and the reopening of gymnasiums.
At the time of the acquisition, the fitness startup offered live weekly classes that users could use the wall mirror device. It also offered on-demand training and personal training.
The segment has since been rebranded as lululemon Studio, but continues to weigh on the fitness apparel company’s balance sheet.
In the three months ended Jan. 29, the company said it took a $443 million charge in mirror-related impairment charges and told investors that hardware sales were lower than expected. Lululemon shares are up about 16% this year.
The Mirror product, which once sold for $1,495, now sells for $995 and requires a $39 monthly subscription fee.
Lululemon admits the home fitness market is under pressure. Similar to Peloton, it has started to turn the segment away from hardware.
In March, Lululemon announced that it will launch a new digital fitness app this summer that will allow customers to access digital fitness content without equipment and at a lower price than their current subscription plan.
“The home fitness area has been a challenge since we bought it. Although members loved our content, equipment sales did not meet our expectations. …As we continue to invest cautiously in this business, we will evolve a model focused solely on hardware to deliver content through a digital and app-based solution,” Lululemon CEO Calvin McDonald said in an earnings call to investors.
“We approach lululemon Studio the same way we approach any innovation. We test, learn and evolve as needed. Although the acquisition may not go completely as originally planned, we are in a much better position. in our understanding of community and accordingly in our new membership program.”
Bloomberg News initially reported that Lululemon was considering selling the mirror.