Lululemon is buying exercise hardware startup Mirror for half a billion dollars

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Lululemon, the corporate behind fashionable health attire, is moving into the {hardware} enterprise with Mirror. The health life-style firm introduced on Monday it will spend $500 million to accumulate the startup, which sells a $1,495 reflective show so subscribers can train whereas concurrently streaming exercises and watching themselves.

The attire firm’s CEO Calvin McDonald tells The New York Times the acquisition is about “strengthening our community and our loyalty and our relationship with our guests and memberships.” He additionally famous that Mirror comes with its personal income mannequin, which he and the crew are “excited about.”

The Times says Mirror expects to usher in over $100 million in income this 12 months and to interrupt even or be worthwhile in 2021. Although McDonald instructed the paper the COVID-19 pandemic didn’t “trigger” the acquisition, the timing doesn’t really feel coincidental.

The pandemic introduced with it a reckoning for retailers — forcing outlets to shut their in-person areas for months and resulting in widespread unemployment. Lululemon’s web gross sales dropped 17 p.c this previous quarter, though its on-line gross sales elevated 70 p.c. Still, one area that’s thriving throughout the pandemic is at-home health options. Peloton, as an example, increased its income by 66 p.c over the past quarter and gained new customers by way of a free 90-day trial provide.

By buying Mirror, Lululemon ensures it’ll have revenue coming in from a separate enterprise whereas additionally staying within the health area. Instructors might put on Lululemon clothes, too, tying the companies collectively and mixing {hardware}, software program, and retail.