Lululemon (LULU) squandering a sizable sum of $ 500 million to buy a Mirror home fitness player makes sense not only from a brand perspective, but also from a pure data perspective.
Mirror app downloads, which provide insight into the company’s namesake hardware, have shot up more than 1,000% each month since January, according to new Sensor Tower data (see charts below). Data shows that Mirror app download growth peaked in March at a whopping 3,000%. Meanwhile, Mirror website traffic has grown steadily by 100% since the end of April, according to SimilarWeb.
All of this occurs when the COVID-19 pandemic spread across the globe and closed gyms, while exercising outside is more cumbersome. The pandemic has led training enthusiasts to invest in building home gyms, lighting a fire for sales by startup tech companies Mirror, Peloton, and Hydrow.
While these types of growth rates for Mirror and Peloton should not be expected to hold, it underscores a fundamental change in the year that is likely to continue for some time. So why shouldn’t a Lululemon jump?
“We believe that people will continue to value convenience and quality and diversified content more and more. The fitness trend at home had already experienced a very sustained boost before COVID, and this unforeseen time has only further intensified an increasing shift toward the convenience of exercising at home. While we don’t pretend to know what will happen to the boutique fitness industry after the pandemic, our industry-leading engagement data points to strong and long-lasting trendlines around home practices. While we saw households use their Mirrors more than 10 times a month earlier this year, we have seen an average increase in workouts per month ~ 50% since the pandemic, “Mirror founder Brynn Putnam told Yahoo Finance. via email on June 1.
The mirror has been on fire.
Putnam, a former Lululemon brand ambassador, will now reconnect with her old friends at the sportswear maker.
Lululemon said Monday night that he will buy the private Mirror in a cash transaction. The company originally invested $ 1 million in Mirror in mid-2019. Not many details about Mirror’s business were shared, other than a note that will hit $ 100 million in sales this year. Lululemon is expected to install Mirrors in its stores to increase brand recognition. Over time, it is conceivable that the company will make Mirror a unique shopping destination for its sportswear and other health and wellness services.
Lululemon CEO Calvin McDonald did not respond to a request from Yahoo Finance for an interview.
“I’m not surprised by the acquisition. I think physical exercise at home is another category that dramatically benefits from this. [COVID-19 situation]. I know Lululemon had made an investment prior to this, so I suspect they liked what they saw when they decided to make a full acquisition, “said Amy Errett, a partner at True Ventures, at The First Trade at Yahoo Finance. True Ventures was one from the first investors in Peloton and Fitbit (now owned by Google).
Errett, who is also the founder and CEO of hair dye company Madison Reed, added: “I think the total addressable market has increased dramatically. I think if you look at the size of the overall fitness market and then look at the size of the gym market, which is quite large, I think the total addressable market is quite attractive. “
