Brands can learn valuable lessons from Lululemon’s failed Mirror acquisition, which resulted in a $443 million loss. The experience highlights the importance of understanding market dynamics, focusing on core competencies, and executing effective marketing strategies.
In June 2020, Lululemon acquired Mirror, an at-home fitness startup, for $500 million. Mirror, which competes with Peloton, offers a wall-mounted fitness device priced at $1,495, allowing users to stream live or on-demand workout classes for a monthly fee of $39.
The acquisition took place during the COVID-19 pandemic when people were confined to their homes and increasingly turning to home workouts. Lululemon’s CEO, Calvin McDonald, emphasized that the acquisition was about strengthening the company’s community relationship with its guests, driving loyalty, and increasing customer engagement.
Mirror’s growth potential, however, has been a subject of concern among analysts. In December 2021, Lululemon slashed…
its outlook for Mirror sales to between $125 million and $130 million, down from the initial projection of $250 million to $275 million.
View this post on Instagram A post shared by lululemon Studio (@lululemonstudio) Lululemon started showcasing Mirror devices in select stores with plans to feature them in 200 more locations across North America.
The company also launched Lululemon Studio Membership, a new membership service that requires a Mirror device and offers additional benefits to members. The Mirror device, now rebranded as Lululemon Studio, had seen some success, with sales exceeding initial expectations in 2020.
However, less than three years later, Mirror represents less than #5% of Lululemon’s total revenue. As Lululemon continues to integrate Mirror into its business strategy, it’s clear that the acquisition has proven to not be a successful venture…
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