lululemon might offload MIRROR.
The latest: Amid slowing demand and shifting fitness habits, the activewear company is rethinking the role of its interactive exercise device.
Earlier this month, lululemon said it’s “pivoting away” from hardware, taking a device-agnostic, app-based approach to digital workouts.
Now, Bloomberg is reporting that the company is seeking a buyer for the equipment maker.
Catch up. Reporting Q4 and full-year 2022 earnings, lululemon revealed a $442.7M post-tax impairment charge related to MIRROR.
Having written down its investment as hardware sales suffer, it’s clear the company’s connected fitness experiment did not go as planned:
- lululemon acquired MIRROR for $500M in 2020.
- In 2021, lulu slashed revenue projections for the fitness screen to $125M–130M from $250–275M.
- Last year, it attempted to bundle MIRROR with exclusive perks as part of a broader membership program.
Not alone, MIRROR’s performance is reflective of headwinds facing the entire smart equipment category.
- Tonal saw its valuation cut from $1.9B to ~$600M in a recent down round.
- Attempting a turnaround, Peloton’s market cap has fallen to $4B from $50B in 2021.
- After canceling its IPO, NordicTrack parent iFIT had its valuation cut by 60% in a 2022 funding round.
Looking ahead: While lululemon declined to comment regarding a potential sale, it’s no secret that the company doesn’t see its future in MIRROR. The bigger question, though, is which high-tech equipment maker emerges from the post-pandemic crunch.
