Vancouver-based athleisure apparel seller Lululemon is said to be in talks to sell its Mirror technology division, which it spent US$500 million to buy in 2020.
Lululemon is so far not commenting on the news that Bloomberg broke this morning.
“We don't comment on rumors or speculation," the company told BIV in a statement.
"As previously announced, we are shifting the focus of lululemon Studio from a hardware-centric offering to one that is also focused on digital app-based services going forward. This work is underway, and our strategy will enable us to create long-term value and build a larger community of guests with a deeper connection to lululemon.”
Bloomberg did not identify its sources, and said that they asked not to be identified because they were discussing confidential information.
The Mirror division’s marquee product is a device that appears to be a standard mirror, unless it is turned on.
Users activate their Mirror to enjoy augmented reality. A fitness instructor could appear – wearing Lululemon clothing, and ready to guide the user through a workout.
The Mirror could show videos that include Lululemon representatives, or community events.
Initial Mirror devices in Canada cost $1,895 plus tax. Mirror memberships cost $49 per-month for unlimited live and on-demand fitness classes for up to six household members.
Lululemon CEO Calvin McDonald said in 2021 that part of the rationale for the acquisition was that it would lead to a “natural synergy” of driving customer loyalty and generating future sales.
Lululemon had been rapidly installing Mirror kiosks within Lululemon stores to try to encourage sales.
The potential liquidation of Lululemon's MIrror business comes as society has largely learned to live with COVID-19, and people are not limited to their homes to work out – a phenomenon that led to demand for Mirror devices.
Businesses that provided technology to access to home workouts, such as Peleton Interactive Inc. (Nasdaq:PTON) have watched their share prices collapse. Peleton shares, for example, are down more than 91 per cent in the past two years, to US$9.66 in late morning trading Vancouver time.
Lululemon shares were flat late this morning Vancouver time, and, in contrast, are up more than 14 per cent in the past two years, to US$368.49.
In late March, after its most recent quarterly earnings, Lululemon shares climbed more than 10 per cent to US$367.27.
That came as the company said that it earned US$119.8 million in profit, in the quarter ended Jan. 29. This came despite it recording a post-tax impairment and other charges related to its Mirror business totalling US$442.7 million.