Peloton (NASDAQ:PTON) jumped over 30% higher after-hours Wednesday after the company announced it signed a five-year strategic partnership with lululemon (NASDAQ:LULU). Under the agreement, lululemon will become the primary athletic apparel partner to Peloton and Peloton will become the exclusive digital fitness content provider for lululemon.
After surging more than 30% upon the announcement, shares of Peloton have since settled down - last up 16%.
Starting from October 11, 2023, customers will find co-branded clothing from lululemon's various product collections for sale at Peloton retail outlets and on the apparel.onepeloton.com website in the United States, United Kingdom, and Canada. Moreover, these items will also become available in all five of Peloton's worldwide markets by March 2024.
Commencing November 1, 2023, members of the lululemon Studio All-Access program will enjoy access to an extensive library of Peloton classes at their current subscription rate. This partnership designates Peloton as the sole provider of digital fitness content for lululemon Studio Members. The Studio device and companion app will receive weekly updates with fresh Peloton content, including new material produced by lululemon through the spring of the following year. Furthermore, exclusive Peloton content will be accessible to participants in lululemon's complimentary Essential membership program, which currently boasts over 13 million members.
“As a leader in technical athletic apparel, this partnership will create a powerful product offering for Peloton Members and fans," said Celeste Burgoyne, President, Americas and Global Guest Innovation, lululemon.
“By bringing together the best in fitness content with the best in athletic apparel, we’ll give our communities one-of-a-kind experiences and special content that will inspire them to achieve their goals," said Dion Camp Sanders, Chief Emerging Business Officer at Peloton.
Lululemon also said it plans to cease the sale of the lululemon Studio Mirror by year-end while committing to delivering consistent service and support for existing Mirror devices. Additionally, as of November 1, 2023, Lululemon's digital app-only membership tier will be discontinued, and current members of the lululemon Studio app-only membership will have the option to transition into a Peloton App One Membership.