Lululemon Athletica stock on the rise on 500 million dollar acquisition of Mirror
Jul 1, 2020
Lululemon Athletica stock started rising after hours on Tuesday, following news on the yoga fashion brand’s acquisition of Mirror, a home fitness business. The deal’s price tag is 500 million dollars.
The market sees this deal as a move by the fashion retailer to meet consumers where they are now (worldwide lockdowns have been a boon for all sorts of at-home entertainment, fitness and other activities.)
Mirror will operate as a stand-alone entity under Lululemon, with current CEO and founder continuing to serve as the company’s CEO and report directly to Lululemon CEO Calvin McDonald.
On the acquisition, McDonald said, “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 shares rise 3.5 percent on the acquisition of Mirror
Lululemon (LULU) announced earlier this week it would buy the start-up that provides an interactive exercise platform featuring live and on-demand classes via an interactive smart mirror. “Mirror will bolster the company's digital sweatlife offerings and bring immersive and personalized in-home sweat, and mindfulness solutions to new and existing Lululemon guests,” said Lululemon.
The acquisition follows a previous investment. mon made an initial investment in the firm. Lululemon said that the move would allow it to bring more content to consumers via brand ambassadors for both companies, ambassadors such as Mirror’s own founder, Brynn Putnam, a former Lululemon brand ambassador.
Although the half-billion dollars price has raised some eyebrows, Lululemon can afford the purchase, with more than 800 million dollars in cash available. On the back of the news, shares at Lululemon gained more then 3.5 percent. The stock is up more than 27 percent year to date.
Image: Lululemon Facebook