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Lululemon wants to grow home fitness business with membership program

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Athleisure apparel brand Lululemon announced Wednesday that it will expand the reach of interactive fitness startup Mirror, making it a core element of a new paid membership program called Lululemon Studio.

For $39 a month, members gain access to thousands of streaming and in-person workout options, receive perks and discounts on Lululemon apparel, attend free classes in-store, and in-person training. Get early access to Lululemon events and more. A smart mirror device must be purchased separately, and in addition to streaming workouts from interactive fitness startups required for Lululemon Studio membership, members have direct access to eight studio partners, including Pure Barre, Rumble, and Dogpound. increase. These studios offer class discounts to Lululemon Studio members.

For apparel companies, as the at-home workout craze has taken hold during the Covid-19 lockdown, it’s tapping into more of the fitness potential made possible by Lululemon’s $500 million purchase of Mirror in June 2020. This is an opportunity to introduce you to Since then, people have gotten used to sweating it out with other people in gyms and training classes.

Lululemon is trying to fill that gap.

“What we saw with connected fitness was a change from the pandemic where we were really looking for convenience and ability, not just a solution for our guests to work out at home,” said Lululemon. CEO Calvin McDonald and executives said in an interview.

He declined to say whether Mirror is profitable or how many active users it has, but said it has helped apparel retailers attract new customers.

“Profitability is within our control,” he said. “We are choosing to invest to grow our business.”

McDonald forecasts earnings from Miller over the next five years, and expects the fledgling footwear business to account for 5% of sales.

Analysts have expressed concerns about Mirror’s growth potential. In December, Lululemon cut its 2021 sales forecast for Miller from $250 million to $275 million to $125 million to $130 million. Since the early days of the pandemic, demand for home fitness equipment has slowed as people have more options for where to exercise.

After being an early pandemic winner, the Peloton has changed its fortunes. It restructured its business by laying off employees, closing stores, outsourcing production, and announcing plans to sell luxury bicycles on Amazon. It reported a loss of $1.2 billion in the fourth quarter. In July, connected fitness equipment maker Tonal, which sells wall-mounted devices for $3,495, cut more than a third of its workforce.

Simeon Siegel, Managing Director of BMO Capital Markets, said: “What each company has discovered is that they are in the business of selling shirts and shoes.”

McDonald believes Mirror still has great value, and this latest iteration is part of how the company saw fitness startups hiring when it acquired it. said. Since the deal, Lululemon has provided better insight into which fitness trends are of interest to shoppers, such as versatility and how multiple people within one household are using the Mirror. I was able to get Shoppers who use Mirror are also more loyal to the Lululemon brand, the company said.

Mike Aragon, who has been Mirror’s chief executive since the startup’s founder left Mirror in January, said in an interview that the company is planning this initial launch because of its pricing and other benefits it offers. You said you’re using it as a way to assess effectiveness. The company will temporarily cut the price of his connected mirrors by 47% to $795 next Wednesday.

“We will decide on the appropriate price range later, but we believe this is a very good opening promotional price range to drive demand and get people excited about our platform,” he said. Told.