Lululemon moves to shed Mirror as a pandemic-era home-fitness bet shows cracks
“Cause it's like you're my mirror”… but maybe not for long. Lululemon reportedly wants to offload its in-home-fitness biz, Mirror, to its competitor Hydrow. The soft-pants producer bought the exercise startup for $500M in 2020 as living-room sweat sessions drove sales (goodbye suits and gym memberships, hello leggings and Pelotons). Now the 70-pound wall-mounted “mirror,” which displays fitness classes, is weighing down profits.
Self-reflection: In its last reported quarter, Lululemon said it took a nearly $443M impairment charge related to Mirror.
Losing more than a few pound$... Lululemon discounted the Mirror device to $1K (down from $1.5K) as sales came in below expectations.
Buffing out the profit problem… Mirror's drag on earnings has threatened to sour Lulu's otherwise sweet business. Last month the company's stock stretched up after it beat expectations (picture: a 30% sales jump) and shared rosier-than-expected guidance. Other comfy-first brands that saw a pandemic bump (like Crocs) have likewise seen customers hesitant to shift back to “hard clothes.” But Lulu's rush into hardware hasn't aged as well as its leggings
Striking while the iron's hot can get you burned… when the fad cools. At the height of the pandemic, home-exercise tech was a must-have. Peloton went into overdrive trying to keep up with demand for its stationary bikes, and Lulu scrambled to get in on the action with Mirror. But Peloton ended up with a mountain of unsold bikes, and Lulu with Mirrors gathering dust. From indoor bikes to the metaverse to AI, brands that go big on the hot new thing risk mistaking flash-in-the-pan fads for long-term trends.