Dose of Prose
Although some of my favorite fitness studios have started to open up, I personally still do not feel comfortable going back to my workout classes such as pilates and soulcycle. I miss the community feel of group fitness as well as my wonderful instructors, but I’ve managed to fill the void by taking workout classes via Zoom and Instagram live. As this pandemic progresses, I have a strong feeling that the home gym I have created for myself, might be my reality for an indefinite period of time.
I recently started doing some freelance copywriting work for a fitness trainer who is in the midst of launching her online business, which has opened my eyes to what goes on behind the scenes when it comes to the fitness industry. Once I found out that Lululemon (an expensive athleisure and activewear retailer), announced its plans to acquire Mirror (a home fitness startup that sells a $1,495 wall-mounted machine for streaming workout classes), I couldn’t help but to think about the state of our world and the future of fitness overall.
The news of this acquisition sparked today’s blog post, which is not only about the acquisition itself, but rather, why it’s a big deal and what it means for the world of home fitness.
In 2019, we detailed our vision to be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect, The acquisition of MIRROR is an exciting opportunity to build upon that vision, enhance our digital and interactive capabilities, and deepen our roots in the sweatlife. We look forward to learning from and working with Brynn Putnam and the team at Mirror to accelerate the growth of personalized in-home fitness.
Calvin McDonald, Lululemon CEO
Why is this important?
I’m not just talking about this amazing acquisition because I’m a nerd who keeps up with business news. This acquisition means a lot for big fitness brands and for the tech world overall. Here’s why Lululemon’s purchase of Mirror is a big deal:
- The price – in case you haven’t read the title of this post, Lululemon acquired Mirror for $500M. Sounds like a cheap buy to me (I’m being sarcastic in case that didn’t come across in text). This $500M purchase is the company’s first acquisition and follows its $1M investment in Mirror last year.
- The impact – this acquisition further contributes to the rapidly escalating world of home fitness. The typical gym goer’s mindset has now shifted from wanting to engage in fitness activities with other people to wanting a well-rounded workout at home. COVID-19 has limited and prolonged workout options for many around the world. Solutions for home workouts are in high demand. Most, like me, are wary to return to high-risk enclosed spaces. By acquiring Mirror, during this time, Lululemon is taking a bet on the future of fitness.
This isn’t just about getting guests to buy apparel. This is about strengthening our community and our loyalty and our relationship with our guests and memberships, and it’s going to be its own revenue stream model, which we’re excited about. It definitely has helped us learn and see quicker into the future now. Guests have accelerated their behavior and accelerated the adoption of in-home sweat.
Calvin McDonald, Lululemon CEO
Cutthroat Competition – Fitness Brands Want In
At-home fitness startups are becoming the new gyms, especially if they are able to achieve the following:
- providing a list of exercises
- tracking said exercises
- holding users accountable
If you’ve been following Peloton (an at-home biking product), it’s clear that the market for interactive fitness is steadily growing. Mirror is taking advantage of this opportunity to grow, and with its high engagement and stream of reoccurring revenue – it looks like Mirror will have a long road of growth ahead. Since tech businesses are typically valued at higher multiples than retail (a multiple is just biz lingo, don’t let it confuse you – it’s a way to measure the value of a company in relation to other businesses by comparing two financial metrics)…the big fitness brands want in on all of this.
Nike is developing its own app, while other brands are following the steps of Lululemon by acquiring tech startups. Under Armour, for example, paid $475M for MyFitnessPal, a meal tracking app.
Overall, this acquisition just makes sense. There’s no denying that Lululemon and Mirror will make a powerful, synergetic combo in the world of fitness. Here’s why:
- Content creation partnership – Mirror provides Lululemon’s global ambassadors an outlet to create content/workout programs on its device.
- The ultimate lifestyle brand – Lululemon has millions of loyal customers who will be willing to try the Mirror product, which further adds to its growing stream of subscription revenue.
- Product integration – that $500M purchase may seem pricey now, but at this rate, it could look like a bargain in 10 years…think Mirror products in Lululemon stores and special benefits to members of Lululemon’s loyalty program.
Looking Forward
I hope this blog post peaked your interest into the futurology of fitness. Do you think that everyone will eventually return to gyms or continue to shelter and sweat in place even after the pandemic is over? What are your thoughts on this acquisition? Do you like this potential direction that the fitness world is heading in? I think what Lululemon did was strategic and a power move to make and right on time, too. What does your current home fitness routine look like? Leave a comment and let me know! I will admit I am intrigued by the fancy Mirror and Peloton commercials, but before I make that type of investment, Zoom and IG live are good enough for me. We’ll see how all this plays out, but I will say this: connected fitness is here and it’s here to stay.
Until next time,
Kaamilah
