Peloton and Lululemon, former foes, are teaming up together.
The fitness companies announced a five-year "strategic global partnership," which involves Lululemon ditching its Mirror fitness hardware and Peloton ending its private-label fitness clothing. Financial terms of the deal weren't disclosed.
Beginning next month, Lululemon will make Peloton-branded fitness clothing, ending Peloton's two-year-old attempt at producing fitness clothing in-house as a Lululemon rival. The clothing line sparked a lawsuit between the companies with Lululemon accusing Peloton of creating "copycat products." The two companies settled the lawsuit last year.
The new clothing line will be sold online and at Peloton studios beginning October 11.
In return, Lululemon will stop selling its $995 Mirror fitness device by the end of the year and soon end producing its own Peloton-like fitness classes. In the next few months, Peloton's streaming fitness classes will be available in the "Lululemon Studio" app for subscribers. Lululemon relaunched the app about a year ago as a Peloton rival, giving subscribers streaming classes from trendy fitness studios, like celebrity favorites AARMY and Dogpound.
Mirror has been a sore spot for Lululemon since its purchase during the height of the Covid-19 pandemic in 2020. The $500 million acquisition was written off earlier this year, essentially becoming worthless, and forced Lululemon to search for strategic alternatives to the device. A last-ditch effort in 2022 to cut its price and broaden its appeal with new fitness classes seemingly failed to generate interest from consumers.
"By bringing together the best in fitness content with the best in athletic apparel, we'll give our communities one-of-a-kind experiences and special content that will inspire them to achieve their goals," said Dion Camp Sanders, Peloton's chief emerging business officer, in a press release.
Shares of Peloton (PTON) soared 14% in premarket trading Thursday, while Lululemon (LULU) stock was flat.
