Lululemon
Home Workout Trend Picking Up
So far, recent evidence seems to indicate that the risk of transmission is highest in places with talking, heavy breathing, and close contact which describes gyms. States that have reopened early are seeing spiking case counts and being forced to close early. One remedy is mask-wearing, but it's not feasible in many places like a gym or a restaurant.
Given these developments, it's unlikely that gyms are going to be reopening anytime soon. And even when they reopen, many people will stay away due to concerns about their health or spreading the disease to vulnerable people in their families.
Mirror's Value
Lululemon was an earlier investor in Mirror when it invested $5 million in the company that gave the company a valuation of $300 million. Under Lululemon, Mirror will be able to grow faster as it will be sold at the company's stores. For Lululemon, the value is clear, it becomes another outlet to market its products to customers by outfitting its trainers. Also, it can use it to sell products directly and get feedback on its items based on user engagement.
Companies like Nike
Mirror is a giant screen with a wide variety of different home workout offerings. It looks like a mirror when it's not being used, but it becomes a screen with a trainer when used. Due to the nature of the screen, it's easy for users to improve their form since their reflection can be seen along with the trainer.
The upfront cost of the core product is $1,495 with a $39 subscription cost. It's the same value proposition as a Peleton
The deal helped push Lululemon's stock higher. It's more than a 100% above its March lows. Most analysts have a buy rating on the stock, the average price target is $355, and the highest price target is $400. Most analysts and investors are seeing the acquisition as a positive. It cost $500 million but added nearly $5 billion to the company's market cap.
