Lululemon to buy at-home fitness system Mirror for $500 million

Fitness apparel company Lululemon announced Monday it will buy connected fitness company Mirror for $500 million.

The deal is expected to close in the second quarter of the fiscal year.

The deal, which is set to close in the next one to two weeks, gives Lululemon a new revenue stream, as well as an opportunity to more deeply integrate its yoga trousers, sports bras and leggings into home workout classes, in front of the eyes of its prime affluent millennial customer base. Although Lululemon has always leaned into health - with many of its existing stores offering free running clubs or yoga classes - last summer it moved to monetize its workout offerings by opening a Chicago store with a gym. And even as some gyms have reopened with new safety protocols, many customers are still not willing to go back because of worries about catching the virus.

The company said Mirror will operate as a standalone unit, with founder Brynn Putnam continuing to serve as chief executive officer.

The deal builds on a partnership between the two companies that began in mid-2019 when Lululemon made an initial investment in Mirror. The $34 million Series B-1 brought in $34 million for the NY startup's $1,495 reflective guided workout machine, valuing the startup at around $300 million. Backers include Lerer Hippeau, Spark Capital, Point72 Ventures, and LionTree Advisors. The company came out of stealth onstage at TechCrunch Disrupt in 2018. There's stiff competition in the category of connected fitness slabs, including Tonal and Tempo, but Mirror continues to the biggest name of the bunch.