Courtesy Lululemon
- Lululemon purchased Mirror in 2020 for $500 million.
- On Monday, Bloomberg reported Lululemon is exploring a sale of the business.
- An analyst said selling Mirror could eliminate a "distraction" for Lululemon.
Lululemon is exploring a sale of its Mirror fitness-product business, according to Bloomberg.
The sportswear company acquired the business for $500 million in 2020, at the height of the at-home fitness trend, but it has struggled to integrate it with its core business of selling athletic apparel and footwear, with one analyst on Monday writing that selling Mirror could eliminate a "distraction."
"We do believe that the commitment of Lululemon to Mirror has likely waned meaningfully, lately, and expect that management could opt to completely divest the business, to limit any further strategic distraction," wrote Oppenheimer analyst Brian Nagel, in a note to investors.
Oppenheimer has an "outperform" rating on Lululemon's stock. Nagel also wrote that he had not confirmed the accuracy of the Bloomberg report.
While Lululemon's Mirror business has struggled, its overall business remains strong. Lululemon sales increased 30% to $8.1 billion last year.
"We don't comment on rumors or speculation," Lululemon said in a statement provided to Insider. "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."
Some of Lululemon's employees have been skeptical of the company's plans for Mirror, including those who questioned how a $1,495 high-tech interactive screen could be marketed and sold alongside $118 leggings and $128 pants.
Analysts, as well, have long questioned the deal.
At an investor day last year, Lululemon rolled out a new plan for Mirror, including the launch of Lululemon Studio, a membership plan for its Mirror device.
But the company's forecasts for Mirror continued to come up short.
On a March earnings call, Lululemon executives announced a $443 million impairment charge on the business.
"As you know, the overall at-home fitness space remains challenged," Chief Financial Officer Meghan Frank said, on a March call with stock analysts. "Mirror hardware sales during the holiday season came in below our expectation."
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