Lifestyle athletic apparel retailer Lululemon is set to acquire in-home fitness company MIRROR for $500 million, signifying a new path for retailers to follow.
Through its wall-mounted technology, MIRROR offers weekly live classes and on-demand workouts as well as immersive one-on-one personal training experience. In addition to that, Lululemon will offer sweat and meditation classes with its ambassadors on the platform. The mirror itself retails for $1,495 and subscribers pay $39 per month to stream services. Personal training sessions come at an additional cost of $40 per session.
The all-cash deal is expected to close within the next week or two and the company’s founder and CEO Brynn Putnam will continue to lead the company as a standalone business.
MIRROR became a much-desired alternative to the gym during the COVID-19 pandemic. As stay-at-home orders were put in place across the country, fitness enthusiasts turned to at-home workouts, putting MIRROR and its competitors such as Peloton in a new position of demand.
The acquisition was reportedly a natural move for both parties. Putnam was initially introduced to Lululemon as a “sweatlife” ambassador. The partnership later evolved into Lululemon x MIRROR collaborations, ultimately leading the athleisure company to become an early investor in the fitness platform.
The Lululemon, MIRROR acquisition also tends to break the typical M&A mold, wherein deals involving retailers tend to focus on scale and expanding market share. Such “scope” deals, however, will be the new trend in the M&A space, as highlighted in the latest 2020 Consumer and Retail M&A Report.
While both brands will still keep their traditional business models of selling products, this deal marks a paradigm shift for Lululemon as the retailer is now fully embracing experiences first and focussing on the product second.
This allows for the consumer to really engage with the brand and build a deep and meaningful relationship, something consumers have been wanting since the beginning of the pandemic. COVID-19 has been a great reminder that human connection and community is what matters most to consumers.
This move simply proves that retail is headed in a new and more fruitful direction — one toward offering unique consumer experiences.