Why Lululemon Athletica (LULU) Is Buying MIRROR For $500 Million

By Amit Chowdhry ● June 29, 2020
  • Lululemon Athletica Inc (NASDAQ: LULU) has announced that it is buying interactive home gym company MIRROR for $500 million. These are the details about the deal.

Lululemon Athletica Inc (NASDAQ: LULU) has announced that it is buying interactive home gym company MIRROR for $500 million. MIRROR is known for creating an interactive workout platform featuring live and on-demand classes.

MIRROR is positioning lululemon to accelerate its vision and build upon an ecosystem that will fuel the company’s Power of Three growth plan — which includes driving the business through omni guest experiences. And MIRROR will build on the company’s digital sweatlife offerings and bring immersive and personalized in-home sweat and mindfulness solutions to new and existing lululemon guests.

MIRROR offers weekly live classes and thousands of on-demand workouts along with immersive one-on-one personal training. And MIRROR has seen rapid growth and strong engagement since it launched in 2018 as demand for in-home fitness offerings continues to increase significantly.

This transaction builds on a successful partnership between the two companies — which started in mid-2019 with an initial investment in MIRROR by lululemon and also includes a content partnership that brought sweat and meditation classes to the MIRROR platform by lululemon’s Global Ambassadors.

The acquisition will further expand the content creation partnership between the two brands and will help lululemon, MIRROR, and lululemon Ambassadors reach new guests. And the purchase price is expected to be paid from the company’s primary sources of liquidity, which include over $800 million in cash, its existing $400 million revolving credit facility, and a new one-year, $300 million revolving credit facility.

After the completion of the transaction, MIRROR will operate as a standalone company within lululemon and MIRROR founder & CEO Brynn Jinnett Putnam will continue as MIRROR’s chief executive officer, reporting to Lululemon CEO Calvin McDonald. The transaction is subject to customary closing conditions and it is expected to close in the second quarter of fiscal 2020.

Barclays had served as the financial advisor to lululemon. And Fenwick & West LLP and Blake, Cassels & Graydon LLP served as the legal counsel. Cooley LLP served as the legal counsel to MIRROR.

Key Quotes

“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.”

– Lululemon CEO Calvin McDonald

“We are thrilled to officially become a part of the lululemon family. As part of lululemon, MIRROR can further strengthen its position and accelerate its growth by leveraging lululemon’s deep relationships with its guests, ambassadors and communities, as well as the company’s infrastructure, including its store network and ecommerce channels, to acquire new users.”

– Brynn Jinnett Putnam, founder and chief executive officer of MIRROR (and a former lululemon Ambassador)