Lululemon Can’t Sell Fitness Gadget Mirror, Despite 90% Markdown
Athletic apparel company Lululemon paid A$740 million for fitness tech gadget Mirror during the pandemic-driven home fitness boom, but is struggling to find a buyer for the quick-sinking asset, despite slashing its value by close to 90 per cent.
A recent filing showed the company wrote down Mirror’s value to just US$58 million, despite paying US$500 million in 2020. Despite this bargain basement markdown, buyers aren’t interested.
“If you’re selling something today in this market, you’re probably in trouble,” one source close to the situation told On The Money.
“It’s not the time to be selling something — no one is buying things at high multiples.
“The reality is that Mirror is just a larger ‘screen’ than your iPhone or iPad,” one fitness insider told On The Money.
“You don’t need a special mirror — you could literally just lean your phone against the mirror and do a workout video or FaceTime a trainer.”
The 56-inch screen has a single use, making this an expensive folly for consumers, at around A$2,200, plus a monthly subscription fee of A$57.
“They wanted to get in the tech space because they were seeing the growth of Peloton,” the ‘insider’ told On The Money. “They were trying to find the next phase of their business but they ended up investing in just a big old screen.”
A spokesperson for Lululemon said: “We do not comment on market rumours. As we’ve previously shared, we have evolved our Lululemon Studio strategy to focus on a digital app that will create more opportunities for Lululemon guests to become members and engage with Lululemon Studio content.
“We are now focused on bringing this strategy to life.”
In other words, you don’t need the Mirror.