Lululemon invests in new startup

Lululemon has acquired stake in a Canada-based apparel start-up 7Mesh Industries. The acquisition is expected to build upon Lululemon's new approach to technical fabric innovation. The news first broke on Fortune.com.

7Mesh is known for their 250 dollar cycling jackets and 140 dollar shorts. 7Mesh will collaborate with Lululemon's research and development department in a new division called Whitespace.

"It is an interesting collaboration, a relatively small effort if you will, but what we like about it is it is an example of how we are looking to stretch our model of innovation outside our four walls," said Lululemon cfo and coo Stuart Haselden in an interview with Fortune. "Cycling is a category that is small but if we could leverage a partnership with them, it could make sense for us to enter it effectively."

Cycling is a tough apparel category in an athletic wear market dominated by running and yoga gear. Sales growth is strong in categories like yoga gear and basketball shoes, and the athleisure trend has evolved into a permanent staple of American fashion.

Over the past several years, Lululemon has worked to build themselves up as more than just a yoga gear retailer. The investment in 7Mesh will help them to see more innovative offerings, like the Enlite sports bra launched last year.

photo: via Lululemon Facebook page