Former rivals Peloton and Lululemon are now working together. The two fitness companies announced a five-year “strategic global partnership,” under which Peloton would stop making its private-label line of workout apparel and Lululemon will discontinue production of its Mirror exercise devices. The deal’s financial details weren’t made public.
Next month, Lululemon will take over as the major manufacturer of fitness apparel sold under the Peloton brand, substantially reducing the amount of apparel produced by Peloton itself. Lululemon and Peloton are suing one other over the clothing line after Peloton allegedly produced ‘copycat products’. Last year, the two businesses reached a settlement.
Starting on October 11, the new clothing collection will be offered online and at Peloton Studios.
A last-ditch attempt was made to lower the cost
In exchange, Lululemon will shortly stop creating its own Peloton-style fitness programs and will stop selling its $995 Mirror fitness equipment by the end of the year. In the coming months, subscribers to “Lululemon Studio” will have access to Peloton’s streaming fitness courses. About a year ago, Lululemon re-released the app as a Peloton competitor, offering customers streaming sessions from hip fitness clubs like AARMY and Dogpound, which are favorites of celebrities.
Since Lululemon acquired Mirror in 2020, at the height of the Covid-19 pandemic, it has been a source of contention.
When the $500 million purchase was written off early this year, it virtually lost all of its value and compelled Lululemon to look for strategic replacements. In 2022, a last-ditch attempt was made to lower the cost and increase consumer interest by adding new exercise sessions.
We will provide our communities with unique experiences and distinctive content that will encourage them to achieve their goals by fusing the best fitness content with the best athletic wear, said Dion Camp Sanders, chief emerging business officer at Peloton, in a news release.
Peloton stock jumps
Peloton’s attempt to enter the garment market failed
According to Neil Saunders, a retail analyst at GlobalData, the partnership resulted from both companies realizing that “dabbling in areas outside of their core competencies was not yielding results.”
“Peloton’s attempt to enter the garment market failed since the assortment was poor and appeared terribly drab in stores. According to Saunders, the company wasn’t making enough money to justify the operation. The Mirror device from Lululemon failed because it was too pricey and complicated.
The relationship is advantageous for both companies, but Peloton probably needs it more because its financial situation is still precarious, he continued.
