Lululemon Mirror

Consumers continue to stretch the limits of their workout routines while fitness centers and gyms around the nation remain closed or with limited capacity for guests. 

Some consumers have taken to the great outdoors, running in parks or swimming in the ocean. Others have set up mini-workout studios in their homes, tuning into YouTube videos and apps for inspiration. Regardless of consumer preferences, the latter stands to only intensify as the weather gets colder and the world continues to wait for a vaccine. 

But will the exercise-at-home trend continue post-COVID-19? 

As of now, athletic companies and brands are betting the home-fitness trend will last indefinitely. And it’s not hard to see why. 

“People have kind of shifted to that home gym, they’re investing more in it,” Kristen Classi-Zummo, director of apparel market insights at The NPD Group, told WWD. “Look at weights. Anyone who has tried to buy a pair of 10-pound weights these past couple of months [has noticed] they’re hard to find.” 

Likewise for adult bicycles, which Walmart Inc. ceo Doug McMillon said were selling out at the big-box retailer earlier this year, a phenomenon being repeated at bicycle stores throughout the U.S. The waitlist to buy a Peloton (the $2,000-plus, stationary bicycle) is more than two months. In the meantime, cyclist enthusiasts can rent out Flywheel and SoulCycle bikes in their homes for roughly the same price. 

“A multiyear apparel casualization cycle tailwind is in early innings,” John Kernan, equity analyst at Cowen, wrote in a note, reflecting the need for both more activewear and equipment options — even if they’re in unfamiliar places. 

Lululemon Athletica hasn’t shied away from the at-home fitness trend, either. The ath-leisure apparel and accessories maker, known for its large-scale fitness events and in-store yoga classes, revealed plans to acquire at-home fitness system Mirror for $500 million earlier this year, securing its place in the home-workout sphere. Lululemon also offers Instagram workout sessions and held its annual SeaWheeze half marathon virtually this year, allowing people in more than 100 countries to participate in the run without leaving home. 

But Lululemon’s acquisition of Mirror is a sign of bigger things, said Simeon Siegel, managing director and senior retail analyst at BMO Capital Markets. Namely, “that there are many at-home fitness pandemic beneficiaries,” Siegel wrote in a note. “With the pandemic-driven unique mindset recalibration, now’s the time for equipment sales.” 

That includes sportswear and fitness companies — everyone from athletic giant Nike to boutique studios — capitalizing on online exercise classes so consumers can sweat at home

While some digital workout sessions are free (Nike removed the paywall for its Nike Training Club post-pandemic, for example), the even greater value is in the halo effect, reminding consumers to stay loyal to their favorite brands when it comes time to replenish their activewear supply, said Rori Duboff, managing director of innovation and strategy at Accenture Interactive.

“A great example of this is Lululemon,” Duboff said. “The idea is that you’ll be able to try multiple new outfits every day in your Mirror and then buy it directly without going into a Lululemon store.”

Whether or not this behavior will stick post-COVID-19 is uncertain. But either way, Wall Street has taken note, shares in companies that offer some sort of at-home fitness experience rising. Shares of Peloton have surged more than 195 percent year-over-year, while Lululemon is up roughly 107 percent year-over-year and Nike has risen about 32 percent year-over-year.) 

“I believe at home fitness will out-last COVID, but will come to complement gym memberships rather than substitute them,” Siegel said. “Further, I’d expect a proliferation of at-home content as trainers find new and easy ways to reach their audience at home.”

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