Lululemon, the yogawear specialist, has agreed to pay $500m to purchase Mirror, a home-workout tools firm backed by hedge fund supervisor Steve Cohen.
Mirror, which was based 4 years in the past by a former skilled ballet dancer, sells wall-mounted, internet-connected screens for $1,495 every earlier than tax — plus a $39 month-to-month membership payment — and has develop into a well-liked various to the fitness center amongst well-heeled customers.
The acquisition of the New York-based start-up reveals that the urge for food to do offers persists in some company boardrooms, at the same time as considerations develop over an increase in US coronavirus infections.
Each corporations have sought to capitalise on lockdown traits. Whereas the closure of retail shops has damage Lululemon’s bricks and mortar gross sales, its on-line enterprise has surged as working from dwelling fuels buyer demand for comfy clothes. Shares of the Vancouver-based firm have greater than doubled from March lows, giving it a market capitalisation of $38bn.
Housebound customers unable to get to the fitness center have turned to companies corresponding to Mirror and Peloton, which pioneered internet-connected exercise bikes.
Calvin McDonald, Lululemon’s chief govt, mentioned on Monday that the marketplace for at-home exercise companies was rising “exponentially”.
“We see the dimensions and potential [in] this area as being very dramatic,” he mentioned. Lululemon deliberate to promote Mirror’s tools by itself web site and shops, he added.
Mr Cohen joined Mirror’s board final yr after his enterprise firm, Level72 Ventures, led a $34m funding spherical. Brynn Putnam, who began Mirror in 2016, mentioned she pitched Mr Cohen on the funding as he was understanding on the treadmill.
The acquisition marks a fast turnround for different enterprise funds, together with Lerer Hippeau and Spark Capital, which invested within the firm earlier than it produced its first product. Mirror raised $72m in whole from non-public buyers, in accordance with PitchBook knowledge.
Mirror was set to generate greater than $100m in revenues this yr, Lululemon mentioned. Its service gives lessons from boxing to meditation and is utilized by celebrities together with musician Alicia Keys.
Lululemon plans to fund the acquisition by way of a mixture of money readily available and present and new lending amenities. The deal is anticipated to finish inside two weeks.