(Bloomberg) — Lululemon Athletica Inc. is exploring a sale of Mirror, the fitness-equipment maker it acquired for $500 million in 2020, according to people with knowledge of the matter.
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Lululemon is working with an adviser to solicit interest in the Mirror, said the people, who asked not to be identified as discussing confidential information.
Lululemon’s shares were down 0.1% to $368.07 at 12:49 pm in New York on Monday, giving the company a market value of about $47 billion.
Mirror’s hardware sales have missed Lululemon’s projections and the Vancouver-based company took $443 million in impairment charges on the business in the fourth quarter.
The company, which at one point was selling Mirror products in-store, has pivoted to a digital and app-based product that has been rebranded as Lululemon Studio. But it isn’t eliminating the hardware — it’s just no longer a requirement. Luluemon, led by Chief Executive Officer Calvin McDonald, has said its new app will launch this summer with a lower subscription rate.
“We don’t comment on rumors or speculation,” a representative for Lululemon said in a statement. “As previously announced, we are shifting the focus of Lululemon Studio from a hardware-centric offering to one that is also focused on digital app-based services going forward. This work is underground, and our strategy will enable us to create long-term value and build a larger community of guests with a deeper connection to Lululemon.”
Fitness-focused hardware companies have struggled since the pandemic ended, sending consumers back to in-person or group workouts. Peloton Interactive Inc., for example, has seen its stock slump roughly 92% in the past two years, while Tonal’s CEO recently stepped down after the company raised funding at a significant discount to its prior valuation.
–With assistance from Kim Bhasin and Crystal Tse.
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