Lululemon Takes A Long Look In The Mirror

Lululemon Takes A Long Look In The Mirror

Morning folks,

In the midst of the COVID-19 crisis, it seems a lot of people have discovered alternative ways of living. It’s been an awakening for many who never thought such options were available to them in the first place.

I’ve been a big fan of Peloton for a long time now. The reason I like Peloton is that they provide a brilliant alternative to a “normality” that many people can’t get on board with. Most people want to be healthy and engage in healthy pursuits, but for a lot of people, the gym is their worst nightmare. It’s for that reason that companies like Planet Fitness were such a success. Their mission of creating a “Judgement-Free Zone” resonated with a large number of casual gym-goers.

The outbreak of COVID-19 caused everyone to find alternative exercise routines. Not only were gyms shut, but team sports and other activities were put on hold. Home exercise equipment like kettlebells and weights were in high demand, with many stores selling out in the early days of the lockdown. Meanwhile, YouTube channels that focused on yoga and pilates saw a large spike in subscribers.

It was, of course, no surprise that Peloton had a good quarter, with key performance metrics blowing past expectations.

Connected fitness is not a new industry. Since the release of the first iPhone, companies like Nike have been trying to harness technology to create fitness ecosystems like Nike+. Fitbit went a step further by putting a fitness tracker on our wrists. It’s taken a long time, but I believe we are now entering into a new phase of connected fitness. The infrastructure is now in place: Most people have a smartphone in their pocket, many have a fitness tracker, and high-speed internet is widely available even outside the home

With that in mind, I’m very intrigued by the latest announcement from Lululemon, which is acquiring connected fitness startup Mirror for $500 million. Mirror (with a big m) provides an interactive mirror (small m) that includes a microphone and front-facing camera. The Mirror streams interactive workout classes covering everything from yoga and pilates to kickboxing and barre. During live classes, instructors can provide feedback and motivation while a heart-rate monitor tracks your progress. The Mirror costs around $1,500 plus a $39 per month subscription.

The similarities to Peloton are obvious both in the offering and the cost. However, Mirror has one big advantage over Peloton’s bikes and treadmill in that it accommodates for those who don’t have ample space in their apartment for gym equipment.

With only $100 million in sales last year, Mirror won’t have much impact on Lululemons $4 billion annual revenue just yet. However, being part of a $40 billion apparel giant will certainly help the company spread awareness of its product. It’s worth noting that a few years ago, UnderArmour spent over $700 million on connected fitness startups that failed to live up to expectations. I’m cautiously optimistic that Lululemon won’t make the same mistake with Mirror.


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