Peloton and Lululemon are joining forces.
The two companies announced a five-year partnership Wednesday that will see Peloton become the exclusive fitness content provider for Lululemon’s exercise app. Lululemon will become Peloton’s primary athletic apparel partner, and a select number of Peloton’s instructors will become ambassadors for the apparel retailer.
Peloton’s stock jumped more than 10% in extended trading on the news. Shares of Lululemon — which has a roughly $48 billion market cap compared to Peloton’s $1.7 billion — were flat in after-hours trading.
As part of the announcement, Lululemon said it plans to stop selling its Studio Mirror, which allows users to stream workout classes, by the end of the year. The company had been exploring a sale of the product and had approached competitor Hydrow as a potential buyer, CNBC previously reported.
During the three months ended Jan. 29, Lululemon took a $443 million impairment charge related to Mirror. In a March call with investors, it said hardware sales had come in below expectations.
Following the announcement, the fate of Mirror, and whether the product will be sold off, was unclear.
The news comes one day after Peloton announced co-founder and Chief Product Officer Tom Cortese is leaving the company. Peloton is shifting its strategy and branding under CEO Barry McCarthy to renew its focus on its app and content over its pricey exercise equipment.
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