Lululemon could be looking to offload one of its biggest assets.
Bloomberg reports that the activewear giant is working with an advisor to garner interest in Mirror, the at-home fitness equipment company it bought in 2020 for $500 million.
Lululemon jumped on 2020’s pandemic-driven at-home fitness boom to buy Mirror — which makes an interactive screen for streaming workout videos.
But in a March 2023 earnings call, the company admitted that “since our [Mirror] acquisition, the at-home fitness space has been challenging. While members love our content, hardware sales did not match our expectations.”
Lululemon’s year-over-year total revenue increased 30% to $2.8 billion in 2022, but the company took $443 million in impairment charges related to Mirror in the fourth quarter.
“We are pivoting away from the hardware-centric business that we acquired to also focus on a more efficient app-based model,” Lululemon said in its Q4 2022 earnings call.
Mirror’s struggles are on par with other hardware-focused fitness companies as customers inch back toward pre-pandemic levels of gym visits. Peloton’s stock has dropped about 92% over the past two years, while Tonal’s valuation has decreased by about $1 billion since 2021.