Peloton Interactive’s stock experienced a significant jump after hours on Wednesday, following the announcement of an exciting five-year partnership between the connected-exercise-bike maker and yoga-wear giant Lululemon Athletica. This collaboration aims to combine digital fitness with high-quality workout gear and athleisure wear, commencing next month.
Adapting to the Changing Landscape in the Fitness Industry
With the fitness industry undergoing a significant shift due to the pandemic, this partnership signifies a strategic move towards recalibrating and capitalizing on new opportunities.
Exclusive Digital Fitness Content Provider
As part of this partnership, Peloton will take on the exclusive role of being Lululemon’s “primary athletic apparel partner,” offering their customers access to exceptional digital fitness content. Additionally, some Peloton instructors will promote Lululemon’s clothing, strengthening the overall partnership.
Positive Market Response
The announcement was met with enthusiasm from investors, as shares of Peloton soared by 13.3% after hours on Wednesday. Lululemon’s stock, on the other hand, remained unchanged during the same period.
Expanding Reach and Co-Branded Products
Customers from North America, the U.K., Germany, and Australia will be the primary target for this partnership. Starting from October 11th, co-branded clothing across Lululemon’s products will be available both in Peloton stores and online in the United States, the U.K., and Canada. By March, these products will also be accessible in Peloton’s other markets. Additionally, starting November 1st, Lululemon Studio All-Access Members will gain access to Peloton classes, further enhancing the overall offering for customers.
Focus on Future Growth
In line with this strategic partnership, Lululemon has announced plans to discontinue selling the Lululemon Studio Mirror by the end of this year. However, they will continue to provide support for Mirror devices, which were acquired by Lululemon for $500 million in 2020. This shift in focus underlines the commitment to embrace the changing landscape of the fitness industry.
The joint venture between Peloton and Lululemon represents an exciting and strategic move in the ever-evolving world of fitness. With their combined expertise and resources, these industry giants are well-positioned to shape the future of digital fitness and athletic apparel.
