Local ShoppingLululemon lays off 100 amid Lululemon Studio integration

Lululemon lays off 100 amid Lululemon Studio integration

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Dive Brief:

  • As part of its strategy shift toward digital content, Lululemon laid off 100 employees from its Lululemon Studio business (the arm that includes Mirror), a Lululemon spokesperson said in a statement.
  • Lululemon Studio will be fully integrated into Lululemon and a majority of Lululemon Studio employees were “offered ongoing roles to support the future vision of lululemon Studio,” the spokesperson said. The layoffs were mentioned by several employees on LinkedIn with roles in social mediatalent acquisition and content strategy.
  • The athletics brand acquired the at-home fitness platform Mirror — known for its premium fitness technology device — for $500 million in 2020, initially allowing it to operate as a stand-alone company. Lululemon released Lululemon Studio, its replacement for Mirror’s subscription program, in September 2022.

Dive Insight:

Layoffs at Luluelmon Studio come after the company has slowly shifted its emphasis away from Mirror’s hardware.

“As part of the evolution of lululemon Studio, we made the decision to restructure the business and fully integrate it within lululemon,” the spokesperson said. “This shift, as well as our evolved strategy from a hardware-centric offering to one that is also focused on digital app-based services, enables lululemon to better drive long-term value through our Membership offerings and create deeper connections with our community of guests.” 

Although Lululemon Studio’s paid content tier initially required the high-end device (which currently costs a minimum of $995), the company in March announced plans to roll out a cheaper workout subscription that didn’t require Mirror’s device, but still offered the same content. 

Lululemon’s earnings report in March showed that Mirror was a sore spot in the brand’s otherwise strong results. With its hardware sales disappointing and Mirror causing $443 million of impairment charges, Lululemon’s CEO announced it would focus its strategy more on app-based content.

The company then announced in early June that it would expand its digital workout offerings by growing its content from Xponential Fitness, which owns fitness franchises like YogaSix, Club Pilates and Pure Barre. The new partnership also includes discounted rates for subscribers at Pure Barre, Rumble, AKT and YogaSix locations across the U.S.

Reporting from Bloomberg in April, which cited anonymous sources, said that Lululemon was exploring a potential sale of the Mirror business. Lululemon said in a statement to Retail Dive at the time that it does not comment on rumors or speculation.

While Lululemon’s plans for Mirror’s hardware remain unclear, the strategy shift comes as many fitness companies grapple with the downfall of COVID-19 pandemic workout trends.

At-home fitness equipment brand Tonal in April announced it raised $130 million in funding through existing investors, marking a steep decline from its raise of $250 million in March 2021 at a $1.6 billion valuation. The company’s valuation fell to between $550 million and $600 million since that first funding round, according to reporting from The Wall Street Journal in April that cited anonymous sources. Additionally, Tonal’s founder Aly Orady stepped down from the CEO position to take on the chief technology officer role.

Peloton — known for its home cycling bike — has been working to turn around the business following a slew of executive changes and layoffs in 2022. The company in May relaunched the brand with an expanded range of tiered content memberships and a new content feature in order to better position itself as more than a biking company.

The move came a few weeks after Peloton reported its third quarter saw net sales decline 22% year over year to $748.9 million, while its net loss narrowed from $757.1 million to $275.9 million.

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