Lululemon $Five Hundred Million Acquisition Of Intelligent Fitness "Mirror" Company Mirror

Canadian Yoga sportswear retailer Lululemon Athletica Inc. announced on Monday that it will buy Mirror of home fitness equipment manufacturer New York at a price of US $500 million. This will expand cooperation between the two sides from last year and further cater for the trend of home fitness in the post epidemic era.

This is the first acquisition by Lululemon. The transaction is expected to be completed in the second quarter of this fiscal year.

MIRROR was founded by Harvard University graduate, Brynn Putnam, founder of Refine Method in New York chain gymnasium. After the first product was launched in September 2018, market demand increased rapidly. Mirror, based in New York, is known as the world's first company to provide "invisible" home fitness solutions: the core device is a "full mirror" responsive display. When it closes, it is an ordinary mirror. When opened, it is an interactive mirror display equipped with an embedded camera and loudspeaker, which can reflect the movement state of users in real time, and at the same time enable users to see a trainer and classmates who work together. With this mirror, users can change any room in their home into a family gym at any time by just using a yoga mat.

The retail price of this landmark product of Mirror is US $1495, and customers can pay by installments and pay US $42 per month. The subscription fee for the fitness course is $39 per month.

From aerobics, strength training to yoga and boxing, MIRROR has a new 70+ live fitness course every week. Coaches are all top fitness centers and certified fitness experts in the United States. Users can also visit the MIRROR library, which can provide a full range of 24 hours of service a full range of sports courses on demand. In the live broadcast course, the coach will provide real-time guidance and even encourage calls, while training with other trainees will also make it easier for users to keep fit.

Lululemon participated in Mirror's B round of financing last year and invested $1 million. Since its establishment in 2018, the total financing amount of Mirror has reached US $72 million.

Lululemon chief executive Calvin McDonald said in an interview with CNBC that the acquisition is the company's strong potential for home fitness products itself. He said Mirror is expected to earn more than 100 million dollars this year and will be profitable next year. Mirror is currently operating in the United States and has tens of thousands of users. After the acquisition, Lululemon plans to promote Mirror worldwide.

The deal will push Lululemon towards a more experiential lifestyle company and move beyond traditional retailers' positioning. Lululemon has been committed to the cause of fitness. Many of its existing stores offer free treadmills or yoga courses. Last summer, Lululemon opened a new gymnasium store in Chicago to further promote the commercialization of its fitness service.

Hua Lizhi's founder Yu Yan visited the Mirror store in Losangeles's Westfield shopping center when he visited the fashion and lifestyle brand on the west coast this month. For this acquisition, she believes that the significance of Mirror for Lululemon is definitely more than sales of family fitness equipment and courses. Its value as a fitness media and online fitness community can not be underestimated, thereby accumulating rich and accurate consumer data, and in the future there is potential to develop into a more powerful remote home shopping platform.

After the transaction is completed, Mirror will operate as an independent company within Lululemon and retain its chief executive officer, Brynn Putnam. The acquisition will be mainly based on Lululemon's own liquidity, which includes a total of $800 million in cash and $700 million in credit arrangements.

After the news, Lululemon's share price rose 4.1% to 305.1 dollars per share after Monday's trading. Lululemon's stock price has risen by about 26% this year, and its market value is about $38 billion 300 million. Mirror's rival, Peloton, a NASDAQ listed US smart home fitness equipment company, fell 4.6% after Monday, and then rebounded.

With the outbreak of the new crown, many gymnasiums have been closed, and the new generation of family fitness products including Peloton intelligent Internet treadmill and fitness bike and Mirror wall mounted fitness equipment are becoming more and more popular.