Acquisition will advance lululemon’s
strategic vision by strengthening its omni guest experiences
through digital sweat
lululemon athletica inc. (NASDAQ:LULU) today announced that it
has entered into a definitive agreement to acquire MIRROR, a
leading in-home fitness company that created an interactive workout
platform that features live and on-demand classes, for a purchase
price of $500 million.
With its best-in-class content and versatile platform, MIRROR
positions lululemon to accelerate its vision and build upon an
ecosystem that will fuel the Company’s Power of Three growth plan,
which includes driving the business through omni guest experiences.
MIRROR will bolster the company’s digital sweatlife offerings and
bring immersive and personalized in-home sweat, and mindfulness
solutions to new and existing lululemon guests.
Calvin McDonald, Chief Executive Officer, commented, “In 2019,
we detailed our vision to be the experiential brand that ignites a
community of people living the sweatlife through sweat, grow and
connect. The acquisition of MIRROR is an exciting opportunity to
build upon that vision, enhance our digital and interactive
capabilities, and deepen our roots in the sweatlife. We look
forward to learning from and working with Brynn Putnam and the team
at MIRROR to accelerate the growth of personalized in-home
fitness.”
MIRROR offers weekly live classes and thousands of on-demand
workouts as well as immersive one-on-one personal training. MIRROR
has seen rapid growth and strong engagement since it launched in
2018 as demand for in-home fitness offerings continue to increase
significantly.
This transaction builds on a successful partnership between the
two companies, which began in mid-2019 with an initial investment
in MIRROR by lululemon, and also includes a content partnership
which brought sweat and meditation classes to the MIRROR platform
by lululemon’s Global Ambassadors. This acquisition will further
expand the content creation partnership between the two brands and
will help lululemon, MIRROR and lululemon Ambassadors reach new
guests.
Ms. Putnam, founder and chief executive officer of MIRROR, and a
former lululemon Ambassador said, “We are thrilled to officially
become a part of the lululemon family. As part of lululemon, MIRROR
can further strengthen its position and accelerate its growth by
leveraging lululemon’s deep relationships with its guests,
ambassadors and communities, as well as the company’s
infrastructure, including its store network and ecommerce channels,
to acquire new users.”
The purchase price is expected to be paid from the company’s
primary sources of liquidity, which include over $800 million in
cash, its existing $400 million revolving credit facility, and a
new one-year, $300 million revolving credit facility.
Following completion of the transaction, MIRROR will operate as
a standalone company within lululemon and Ms. Putnam will continue
as MIRROR’s chief executive officer, reporting to Mr. McDonald. The
transaction is subject to customary closing conditions and is
expected to close in the second quarter of fiscal 2020.
A conference call to discuss this transaction with analysts and
investors is scheduled for today, June 29, at 4:45 p.m. Eastern
time. If you would like to participate in the call, please dial
(800) 319-4610 or (604) 638-5340, if calling internationally,
approximately 10 minutes prior to the start of the call.
A live webcast of the conference call and downloadable slides
will be available online at: HTTP://INVESTOR.LULULEMON.COM/EVENTS.CFM. A replay
will be made available online approximately 2 hours following the
live call for a period of 30 days.
Advisors
Barclays served as the financial advisor to lululemon and
Fenwick & West LLP and Blake, Cassels & Graydon LLP served
as legal counsel. Cooley LLP served as legal counsel to MIRROR.
About lululemon athletica inc.
lululemon athletica inc. (NASDAQ:LULU) is a healthy lifestyle
inspired athletic apparel company for yoga, running, training, and
most other sweaty pursuits, creating transformational products and
experiences which enable people to live a life they love. Setting
the bar in technical fabrics and functional designs, lululemon
works with yogis and athletes in local communities for continuous
research and product feedback. For more information, visit
WWW.LULULEMON.COM.
About MIRROR
MIRROR is a nearly invisible, interactive home gym featuring
live and on-demand fitness classes and personal training in a
variety of workout genres. MIRROR is creating a new category of
in-home fitness with cutting-edge hardware, responsive software,
and best-in-class content that transforms any room into a complete
home gym. For the first time, the essential components of a great
studio workout – variety, personalization, and community – are
brought to the most convenient place: the home. MIRROR was founded
by Brynn Putnam, creator of Refine Method, named “New York’s
Smartest Workout.” MIRROR is headquartered in New York City.
https://mirror.co
Forward-Looking Statements:
This press release includes statements relating to the
acquisition and the Company's business plans, objectives, and
expected results that are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. In many cases, you can identify
forward-looking statements by terms such as "may," "will,"
"should," "expects," "plans," "anticipates," "outlook," "believes,"
"intends," "estimates," "predicts," "potential" or the negative of
these terms or other comparable terminology. These statements are
based on management's current expectations but they involve a
number of risks and uncertainties. Actual results and the timing of
events could differ materially from those anticipated in the
forward-looking statements as a result of risks and uncertainties,
which include, without limitation: that the potential benefits and
synergies sought in the acquisition may not be fully realized, if
at all; that the Company may need to use significant resources to
respond to a resurgence in COVID-19 cases; that the Company will
incur significant costs in connection with the acquisition, which
could limit its operating flexibility and ability to take
responsive actions to current and future economic uncertainty; that
the Company's current management team has limited experience in
addressing the challenges of integrating the management teams,
strategies, cultures and organizations of the two companies; that
the acquisition may not be well received by customers or employees
of the two companies; that the acquisition may not be completed in
a timely manner or at all; and other risks and uncertainties set
out in filings made from time to time with the United States
Securities and Exchange Commission and available at www.sec.gov,
including, without limitation, its most recent reports on Form 10-K
and Form 10-Q. You are urged to consider these factors carefully in
evaluating the forward-looking statements contained herein and are
cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by these
cautionary statements. The forward-looking statements made herein
speak only as of the date of this press release and the Company
undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances, except as
may be required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200629005789/en/
Investor Contact: lululemon athletica inc. Howard Tubin
604-732-6124 or ICR, Inc. Joseph Teklits/Caitlin Churchill
203-682-8200 Media Contact: lululemon athletica inc. Tatiana
Jovic tjovic@lululemon.com 604-250-9823 or Brunswick Group Eleanor
French efrench@brunswickgroup.com 415-671-7676
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