Vancouver's yoga-wear maker Lululemon Athletica Inc. (Nasdaq:LULU) will partner with Peloton Interactive Inc. (Nasdaq:PTON) in a five-year pact that will see Peloton become Lululemon's exclusive global digital-fitness-content provider, and Lululemon become Peloton's primary athletic apparel partner, the companies said today after stock markets closed.
New York-based Peloton is known for making exercise bikes that have digital content. Lululemon spent US$500 million in 2020 to buy Mirror, a venture that makes devices that appear to be standard mirrors, unless they are turned on. Once activated the Mirror products provide digital videos and augmented reality to help in workouts. Both types of equipment were popular during the COVID-19 pandemic, when people were stuck at home and could not go to gyms.
Lululemon said after markets closed today that it would stop selling its Lululemon Mirror devices before the end of the year. It will continue to service and support the devices, it added. Lululemon had been rumoured to be trying to sell its Mirror division.
Lululemon has shifted to calling its Mirror product and services Studio.
The partnership news quickly pushed shares up Peloton's share price by 14 per cent, while Lululemon's share price rose about 0.9 per cent.
The two companies had originally been partners, with a co-branding relationship in 2016. Recent relations have been more tumultuous.
Peloton took Lululemon to court in 2021 to seek confirmation that its line of active wear did not infringe on Lululemon patents, and that any claims Lululemon makes to the contrary are invalid.
Lululemon then last October reached a settlement with Peloton in the companies' trademark dispute, which included allegations that the exercise equipment maker copied several of the apparel company's designs.
The companies said today that together, the two brands will engage people in the U.S. Canada, the U.K., Germany and Australia through "technical athletic apparel, real life experiences, special programming, and original content."
The plan is for the partnership to expand both ventures' brand awareness. In addition, a select number of Peloton Instructors will become Lululemon ambassadors.
Beginning Oct. 11, Peloton will start selling co-branded apparel at its retail stores and online in the U.S., U.K., and Canada. By March, that will expand to all five of Peloton’s global markets.
Starting Nov. 1, members of Lululemon's Studio all-access program can take any of thousands of Peloton classes for the same price they pay today. This is part of Peloton becoming the exclusive digital-fitness-content provider to Lululemon Studio members.
Peloton will update its content weekly on the Studio device, and companion app, with new Studio content produced by Lululemon through next spring.
In addition, exclusive Peloton content will be available to people who sign up for Lululemon’s free "essential" membership program, which currently has more than 13 million members.