Mirror (Lululemon)

Lululemon acquired Mirror, a home fitness startup, for $500 million in June 2020.¹²¹² Mirror underperformed, leading Lululemon to take a $443 million impairment charge and eventually discontinue the product by the end of 2023.⁵ Lululemon partnered with Peloton in September 2023, making Peloton the exclusive content provider for Lululemon Studio and shutting down Mirror.⁵

Timeline

Money raised

Lululemon acquired Mirror for $500 million in June 2020.¹²¹² Before the acquisition, Mirror had raised $74.8 million from venture capitalists.⁴ Mirror had a valuation of $300 million before the acquisition.⁴ In 2020, Lululemon expected Mirror to generate between $250 million and $275 million in revenue.⁹¹² By the end of 2021, Lululemon cut Mirror's revenue projections by half to between $125 million and $130 million.¹² Lululemon took a $443 million impairment charge related to Mirror.⁵ Mirror's hardware cost $1,495 for the basic version and $2,045 for the family version, with a $250 setup cost.⁴ Mirror's subscription fee was $39.95 per month for classes.⁴ In Canada, Mirror screens launched at a retail price of $1,900 with a $50 per month subscription fee.¹²

Investors named in the sources: Lululemon¹².

What happened

Mirror was founded by Brynn Putnam, a Harvard-educated former ballerina and Lululemon brand ambassador.¹² Putnam came up with the idea for Mirror when she was newly pregnant and trying to work out from home.¹² Mirror launched its interactive home fitness device in 2018.¹² Mirror offered both pre-recorded and live fitness classes, with about twenty live classes each day.¹² Mirror's device was a wall-mounted mirror that turned into a screen for streaming fitness classes.²¹²

Mirror gained momentum through celebrity endorsements from Alicia Keys, Reese Witherspoon, Gwyneth Paltrow, and Kate Hudson.⁴¹² Ellen DeGeneres called Mirror a 'magic mirror' on TV.¹² In early 2020, Putnam said she saw Mirror as the 'next iPhone' and 'the third screen in people's homes.'⁴¹² Before the acquisition, Mirror had raised $74.8 million from venture capitalists and had a valuation of $300 million.⁴ On June 30, 2020, Lululemon announced it would acquire Mirror for $500 million.¹²

Lululemon's CEO Calvin McDonald said the acquisition was driven by the pandemic accelerating the adoption of in-home fitness.⁴¹² McDonald said, 'The opportunity of Covid is that it's brought the future closer to the present.'⁴ McDonald also said, 'We want everybody sweating on a Mirror to be in Lululemon and we want everybody sweating with Lululemon to be engaging and using a Mirror.'⁴ Lululemon planned to sell Mirror in 10 to 15 of its stores by early Q4 2020.¹⁰ Lululemon expected Mirror to generate more than $150 million in revenue in fiscal 2020.¹⁰

In November 2021, Mirror products began appearing in Lululemon's Canadian stores.¹² Mirror screens launched in Canada at a retail price of $1,900 with a $50 per month subscription fee.¹² Mirror founder Brynn Putnam stepped down from her role in 2021.¹² Current and former employees told Business Insider that the acquisition came sooner than expected and technical issues like 'buggy' software went ignored.¹² One employee said members of Lululemon's marketing teams requested not to be placed on projects involving Mirror because of a lack of clarity in roles and responsibilities.¹²

Lululemon cut Mirror's revenue projections by half to between $125 million and $130 million by the end of 2021.¹² Lululemon seemed to have stopped disclosing Mirror sales information after 2021.¹² Chip Wilson, founder of Lululemon, said the company's stores didn't have sales processes in place for a tech product.¹² Wilson said, 'Lululemon buying into a technology company and owning it is way outside their area of expertise.'¹² Wilson said Lululemon bought Mirror 'because they had way too much money in the bank. And they didn't know what to do with it.'¹²

Wilson argued that Mirror works for people who are time constrained or isolated but not for those who can access a studio.¹² Wilson said, 'The target market for Lululemon is a thirty-two-year-old single professional, and as soon as COVID ended, those people were bound to go and leave the home technical space.'¹² In September 2022, Lululemon launched a hybrid fitness platform, marking the next chapter for Mirror.⁹ In 2022, Lululemon and Peloton reached a mutually agreeable settlement in a patent infringement dispute.⁵ In 2023, Lululemon took a $443 million impairment charge related to Mirror.⁵

Lululemon reportedly tried to sell Mirror at a steep discount but was unable to find a buyer.⁵ In summer 2023, 100 Lululemon Studio employees received pink slips.⁵ On September 27, 2023, Lululemon announced a five-year global partnership with Peloton.⁵ As part of the partnership, Lululemon became Peloton's apparel partner, and Peloton agreed to create exclusive digital fitness content for Lululemon Studio.⁵ Lululemon announced it would discontinue Mirror by the end of 2023.⁵

On September 28, 2023, Lululemon laid off 120 employees as it struck the deal with Peloton and pulled the plug on Mirror.³ Starting November 1, 2023, all-access members of Lululemon Studio would be able to access Peloton's classes.⁵ Lululemon ended its digital app-only membership tier.⁵ Content would be updated weekly on the Studio device and app, with new Studio content produced by Lululemon through spring 2024.⁵ Those who signed up for Lululemon's free Essential membership program could also access exclusive Peloton content.⁵

Legal outcomes

• filedIn 2021, Lululemon accused Peloton of patent infringement regarding its apparel designs.⁵
• filedPeloton sued Lululemon in a dispute over an apparel line on November 29, 2021.¹⁸
• settledLululemon and Peloton reached a mutually agreeable settlement in 2022.⁵

Where the founders are now

Brynn Putnam stepped down from her role at Mirror in 2021.¹²

Lessons, as others put them

"They knew nothing about the product, they knew nothing about how they were actually going to sell it."Chip Wilson¹²

Sources

1. Lululemon snaps up at-home workout platform Mirror for ..., retaildive.com, Jun 30, 20
2. Why Lululemon spent $500 million on Mirror, businessofbusiness.com, 2020-06-30
3. Lululemon lays off 120 as it strikes deal with Peloton and ..., thelogic.co, Sep 28, 20
4. Assumptions are treacherous – just ask Lululemon about Mirror, thoughtsparks.substack.com, 3 years ag
5. Peloton, Lululemon Partner on Content as Mirror Gets the Ax, Athletech News, 2023-09-28
9. Lululemon Launches Hybrid Fitness Platform, barrons.com, Sep 28, 20
10. Peloton's competitors raise big money: Tonal, Zwift, Mirror/Lululemon - Peloton Buddy, Peloton Buddy, 2020-09-17
12. Lululemon Tried to Become a Tech Company. It Didn’t Work Out | The Walrus, The Walrus, 2023-04-03
18. Peloton sues Lululemon in dispute over apparel line, retaildive.com, Nov 29, 20

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

If a fact on this page is wrong, use "Report an error" below and attach the record that shows the correct fact. Every report is reviewed by a person before anything changes, and a corrected page says when it was last corrected.

All case files2023fitness tech