Commodities

Lululemon to buy home fitness start-up Mirror for $500 mln

Credit: REUTERS/BRENDAN MCDERMID

Lululemon Athletica Inc said on Monday it would buy home fitness company Mirror for $500 million, as the high-end yogawear company looks to cash in on booming demand for at-home fitness classes spurred by coronavirus lockdowns.

Adds details on deal funding, share price, background

June 29 (Reuters) - Lululemon Athletica Inc LULU.O said on Monday it would buy home fitness company Mirror for $500 million, as the high-end yogawear company looks to cash in on booming demand for at-home fitness classes spurred by coronavirus lockdowns.

The Vancouver, British Columbia-based company's shares, which have gained more than over 27% this year, rose 3% in extended trading.

With gyms and fitness clubs closed due to the COVID-19 pandemic, shut-in Americans have increased purchases of home-workout equipment, boosting sales of companies such as Peloton Interactive Inc PTON.O.

Lululemon, which had to pause its own yoga classes due to the pandemic, is hoping that a deeper integration of its products into home workout classes will help it grab a slice of this boom.

The company has fared better compared with other apparel makers during the pandemic, with sales on its app and website surging 70% in the last reported quarter.

Lululemon said on Monday it plans to fund the deal, expected to close in the second quarter, through a combination of cash on hand and existing credit lines.

Mirror, a New-York based start-up launched in 2018, sells mirror-like video monitors for nearly $1,500 and offers monthly subscriptions for live classes, as well as on-demand workouts.

Shares of Peloton Interactive Inc fell 2% in extended trading after the news of the deal.

(Reporting by Uday Sampath in Bengaluru; Editing by Aditya Soni)

((UdaySampath.Kumar@thomsonreuters.com; within U.S.+1 646 223 8780; Twitter: @sampath_uday; Reuters Messaging: UdaySampath.Kumar.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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