Well-liked athletic attire firm Lululemon can’t discover a purchaser for health product Mirror — regardless of slashing the worth it paid for the system by almost 90%, insiders instructed On The Cash.
Lululemon paid $500 million for the low-tech gadget in the course of the peak of the pandemic-induced train craze in 2020. Nevertheless, a current submitting confirmed the corporate wrote down Mirror’s worth to only $58 million.
One supply with information stated the very fact Lululemon is selecting to promote the product now underscores how keen the corporate is to dump the sinking asset.
“In case you’re promoting one thing at the moment on this market, you’re most likely in bother,” one supply near the state of affairs instructed On The Cash. “It’s not the time to be promoting one thing — nobody is shopping for issues at excessive multiples.”
Lululemon reportedly approached health firm Hydrow in April, however no deal was struck.
“The fact is that Mirror is only a bigger ‘display’ than your iPhone or iPad,” one health insider instructed On The Cash. “You don’t want a particular mirror — you can actually simply lean your cellphone in opposition to the mirror and do a exercise video or FaceTime a coach.”
The 56-inch Mirror features a digital camera so instructors and associates can see customers throughout exercise courses.
Initially, Mirror — launched in 2018 by ballerina Brynn Putnam — bought for $1,495 every, however as demand waned, the worth dropped to $995. Month-to-month subscriptions for courses now value $39.
“They wished to get within the tech area as a result of they have been seeing the expansion of Peloton,” one health insider instructed On The Cash. “They have been looking for the following part of their enterprise however they ended up investing in only a large outdated display.”
Whereas most at-home health merchandise have suffered dramatically since lockdowns ended, Mirror was positioned much more poorly than different firms as a result of it lacked distinctive expertise, corresponding to Tonal’s good gymnasium, or Peloton’s ties to movie star instructors.
“There was an arms race attempting to get into digital health however we’re seeing an enormous reset,” one other supply stated. “Nobody wants 25 apps for health, particularly when there are such a lot of free choices.”
One investor likened the Mirror to the now defunct firm Juicero — an organization that bought a $400 machine to squeeze Juicero-branded juice packets right into a cup.
A spokesperson for Lululemon stated, “We don’t touch upon market rumors. As we’ve beforehand shared, we’ve developed our lululemon Studio technique to deal with a digital app that can create extra alternatives for lululemon visitors to turn out to be members and interact with lululemon Studio content material. We are actually targeted on bringing this technique to life.”