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What Does Lululemon See When It Looks In Its Mirror?

Written by Tom Ryan

Photo: Lululemon/MIRROR

Lululemon last week announced that it absorbed a $443 million impairment charge against its Mirror business and would no longer require members of its paid-membership program, lululemon Studio, to acquire the at-home workout device. Under the current set-up, launched in October 2022, members pay $39 a month to access thousands of streaming workouts via Mirror, which offers on-demand workouts and virtual personal training streamed through a video-enabled mirror screen.  The device costs $995, down from $1,500 when lululemon acquired Mirror for $500 million in July 2020.  Members also receive apparel discounts, free classes at luluemon’s larger “experiential” stores, discounted classes at fitness boutique partners, and early access to in-person events. Studio content will now also be available through an app in addition to Mirror devices at a lower monthly subscription cost. The Studio program will be relaunched this summer. Calvin McDonald, lululemon CEO, previously heralded the Mirror acquisition as the centerpiece of the retailer’s “vision to be the experiential brand.” Last week, however, he told analysts on a quarterly call that the at-home fitness space has been “challenging” since the acquisition and Mirror’s holiday results missed plan. “While members love our content, hardware sales did not match our expectations,” he said.  On the positive side, lululemon’s free Essentials tier of its loyalty program enrolled more than nine million members since launch, better than expected. Perks under the free program, also available to Studio members, include early access to product drops, no-receipt exchanges and select Studio content accessible through the app. “This demonstrates the significant potential behind this program,” said Mr. McDonald. Lululemon’s McDonald is confident the “more efficient” paid app-based model can build on the Essentials’ tier’s success in meeting the company’s broader membership goals of building community, increasing engagement and driving incremental spend. “We view lululemon Studio in the same way we view any innovation,” said Mr. McDonald. “We test, we learn and we evolve as necessary. Although the acquisition has not fully materialized as originally intended, we're in a much better position in our understanding of the community and our new membership program as a result.”

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