Lululemon is known for its yoga wear and sweat pants. CEO Calvin McDonald said, “the acquisition of MIRROR is an exciting opportunity to build upon [Lululemon's] vision, enhance our digital and interactive capabilities, and deepen our roots in the sweatlife.”
Mirror began operations in September 2018 and generated sales of $100 million in 2020.
Why It Matters
Lululemon said it expects to pay for the acquisition using its liquid resources, which span $800 million in cash and an existing $400 revolving credit facility, as well as a new one-year $300 million revolving credit facility.
Mirror will continue to operate as a standalone company within Lululemon. Brynn Putnam, the founder of Mirror, will continue as the company’s chief executive. The transaction is expected to close in the second quarter of the fiscal year 2020.
Almost all of Lululemon’s stores worldwide were closed due to the pandemic, the company revealed in its first-quarter results. Q1 2020 revenue declined by 17% to $652 million, compared with Q1 2019.
According to the Wall Street Journal, the athletic apparel maker is set to reopen all its 490 stores by Wednesday.
McDonald said that Mirror’s acquisition is important in the pandemic era, where customers stop visiting stores.
Lululemon shares traded 3.87% higher at $305.75 in the after-hours session on Monday. The shares had closed the regular session 1.66% higher at $294.35.
Image by Lululemon