Lululemon says Mirror CEO stepping down as fitness company searches for successor

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Mirror CEO Brynn Putnam appears on CNBC’s “Squawk Alley”.

Brynn Putnam is stepping down as chief executive of connected fitness company Mirror, which is owned by Lululemon, CNBC has learned.

Putnam, a former professional ballet dancer, founded Mirror in 2016. She will continue to work as an advisor to Mirror until next July, while the company searches for her successor, Putnam along with Lululemon Chief Executive Calvin McDonald and said in a memo to employees that was obtained by CNBC.

Effective immediately, Mirror has tapped three of its leaders to serve as co-leaders: Tess Hales, head of customer; Olivia Lange, head of operations; and Kristie D’Ambrosio-Correll, chief technology officer. They will all report into McDonald.

In the memo, Putnam and McDonald said it was time for the company “to find the right candidate to drive the brand’s next phase of growth.” Lululemon declined to provide further details.

Last year, Lululemon acquired Mirror for $500 million, hoping to capitalize on the feverish demand for at-home exercise equipment during the Covid pandemic. Mirror’s wall-mounted devices cost $1,495, and users pay a monthly fee to stream on-demand fitness classes ranging from yoga flow to kickboxing.

Lululemon had previously invested about $1 million in Mirror, in mid-2019.

Since the acquisition, the apparel retailer has added Mirror shop-in-shops to about 150 of its stores. It’s aiming to grow that count to 200 by the holidays.

But Lululemon is also having to fork over more money to market Mirror, which sits in an increasingly competitive space. Consumers are heading back to gyms. And rivals — which include Peloton, Tonal and Hydrow, among others — are consistently trying to improve their offerings. New investments are also flowing into the category. Hydrow, for example, announced Tuesday it completed fresh financing with celebrity backers Lizzo and Justin Timberlake.

Lululemon’s McDonald told analysts during a conference call earlier this month that Mirror still has “low awareness” among many consumers. And the cost of digital marketing is rising, he said, making it more expensive for the business to acquire new members.

According to Wall Street research firm Jefferies, Peloton held the spot as the most visited online, connected fitness platform in August. The cycle maker is also increasing marketing spending, as visits to fitness centers have been normalizing over the summer. As of earlier this month, Jefferies found gym visits in the United States back to about 90% of January 2020 levels, and down just 1% from the same period in 2019.

Lululemon doesn’t break out Mirror’s sales on a quarterly basis, but the company said in June that Mirror was on track to deliver between $250 million and $275 million in revenue in 2021. Mirror is expected to make its debut in Canada in the coming weeks.

Lululemon shares are up about 22% year to date. The company’s market cap is nearly $53 billion.

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