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$500 Million Acquisition Of Mirror: Inspiration And Persistence Of A Female Entrepreneur

2020/7/21 13:59:00 24

Lululemon

On June 29, lululemon athletica Inc. (lululemon), a Canadian Yoga sportswear retailer, announced that it would buy New York home fitness equipment manufacturer mirror for $500 million. As soon as the news came out, it attracted wide attention from all walks of life.

It is worth mentioning that behind the brand, which has been founded for less than four years, there is a great female entrepreneur, Brynn jinnett Putnam (Brynn Putnam or Brynn for short). In this article, luxuriant will show her entrepreneurial process and further explore why lululemon chose mirror for her first acquisition in history.

The first investment was made on the day the baby was born

LeRer hippeau venture, an early venture capital fund in New York, was the first to invest in mirror.

This organization has invested in a number of new Internet brands that we are familiar with today in Angel round, such as glossier, everlane, WarBy Parker, the originator of DTC. In addition, it is also the b-round investor of allbirds, a wool shoe brand.

Interestingly, LeRer hippeau venture has repeatedly tweeted "don't mess with Brynn!" on official twitter, saying she is very good at convincing people of her vision and following her development.

This is not without a reason, because Brynn didn't even have a prototype in hand when he found the investment agency!

Brynn, 38, recalls his financing experience four years ago: "most people do something ugly but practical, get the first users, find someone to invest, and then make the brand bigger. On the contrary, I first figured out what the brand was like, and used simple animation videos to show investors my ideas and abilities

At that time, brynor, as the sole partner of rryna, didn't always need to introduce himself to Bryna

In the face of doubt, she said: "I've never had a boss, and I haven't worked for any large organization or company. I've had very little so-called formal business training", but this has decided that "most of our products are good products that customers need most, not boring products from big systems.".

Finally, on the day of his son's birth, on November 15, 2016, Brynn received the seed round investment of LeRer hippeau venture.

Mirror, which was founded less than four years ago, has gone through four rounds of financing, raising a total of 74.8 million US dollars, including:

Seed wheel: on November 22, 2016, LeRer hippeau venture and first round capital participated in the investment

Round a and round B: on February 6 and September 6, 2018, spark capital, the US investment management company, led the investment respectively

Round B-1: on October 30, 2019, the Wall Street hedge fund point72 ventures led the investment with lululemon participating. After this round of financing, Steven Cohen, chairman and CEO of point72 ventures, will join the mirror board of directors.

In 2019, the sales revenue of mirror will reach about 45 million US dollars. This year, it is expected to exceed the $100 million mark. In 2021, it is expected to achieve a break even or a slight profit.

Find the inspiration of creating mirror from the feedback of gym users

Born in a middle-class family with a stable income and a well-off life on the upper east side of Manhattan, Brynn started her dance career at the age of 16 in the New York City Ballet. She was admitted to Harvard University in 2001 and studied for a bachelor's degree in Russian literature and culture. After graduation, she toured with the Pennsylvania ballet and Montreal ballet, and taught part-time in some of the top gyms and boutique fitness studios in New York City.

Similar to chip Wilson's experience of founding lululemon, Brynn found his entrepreneurial inspiration in the gym.

After leaving the ballet, Brynn, with only $15000 in savings, opened his own boutique fitness studio refine method in a 47 square meter chapel. However, this temporary space must be returned to the church every Saturday. In addition, Brynn couldn't bear to travel between the gym and home every day because of her pregnancy. Therefore, she decided to find the perfect equipment and operation mode for fitness at home.

"I'll have dinner with users, or sit outside the bathroom and listen to what they're saying and what products they need. I will reply to each user's email personally, just because I want to hear and see what people are saying. "

As the so-called "never forget, there must be a response", in a user email she received, a piece of inconspicuous text let Brynn "wake up like a dream":

In the e-mail, the user praised the mirror installed in the gym and said that the mirror is the first "medium" for interacting with fitness partners and feedback on whether the fitness movement is standardized or not. Brynn, who used to be a ballerina who used to deal with mirrors all the time, woke Brynn: "I thought," Oh, mirrors! You know, people care about mirrors. "

Integrating women's ultimate pursuit of aesthetics into product design

Brynn participated in the prototype design of mirror in the whole process. In order to test the product, she had earlier dragged the prototype of mirror smart mirror to refine method studio to obtain feedback from loyal users. "It's huge, there's a lot of metal, and it's not easy to move," says Kailee comb, who is now mirror's vice president of fitness content at the time

After two years of design improvement, in September 2018, mirror finally launched this intelligent fitness "full body mirror" with a width of 56cm, a height of 132cm and a thickness of 3.5cm, and put into production in Mexico.

When the camera is turned off, it can interact with the fitness instructor in real time. When the camera is turned off, it can reflect the real-time state of the fitness course with the user.

With this mirror, users can turn any room of their home into a family gym with only a yoga mat. They can experience 50 different sports modes, such as aerobic exercise, strength training, barbell, boxing, yoga, Pilates and so on, through the control of mobile phone app.

Mirror has a new 70 + live fitness course every week. The coaches are certified fitness experts from the top fitness centers in the United States. Users can also access mirror library on demand courses at any time. In addition, the mirror monitor can synchronize a Bluetooth heart rate monitor (included with purchase) or apple watch to track user fitness data.

In recent years, Huali Zhi has reported a number of home smart fitness projects, such as peloton, the indoor rowing machine brand hydro, etc. Among them, the most similar to mirror is tonal (wall mounted household intelligent power equipment, priced at $2995 / set).

These two projects were launched almost at the same time, but by contrast, mirror's aesthetic advantages are highlighted: for example, the thickness of tonal display is five times that of mirror mirror, but its length is only half of its length, which makes it more abrupt and heavy when placed at home.

What's more, the pursuit of aesthetic perfection has made mirror's pictures more powerful in social media, and has been warmly sought after by many celebrities.

Why lululemon holding hands with mirror?

Epidemic situation forces home fitness market to accelerate development

Calvin McDonald, chief executive of lululemon, once said: "the acquisition of mirror is an exciting opportunity to enhance our digital and interactive capabilities and deepen our foundation as an experiential brand, and we look forward to working together to accelerate the development of our home fitness business (in addition to online fitness courses)"

"On demand fitness is exploding," said Eric hippeau, managing partner of LeRer hippeau, at a recent venture capital sharing meeting. Before the epidemic, we can see that more and more people like to keep fit at home according to their own needs. The epidemic situation has increased the attraction of such services to the public. One of our investments, mirror, is an example. Peloton is another company that has clearly benefited. Classpass has also made adjustments in this direction. "

At the same time, John peloton, the chief executive of the company, said: "the growth of smart phone and office phone in the United States has become a strong driving force for the company's quarterly growth

The sales of American indoor rowing machine brand hydrow increased by 400% during the epidemic period, and successfully completed a new round of financing of US $25 million in mid June.

From the perspective of pricing, the threshold of mirror is lower than that of other similar brands: the mirror price of mirror is $1495, plus the shipping and installation costs of $250, and the attached fitness course subscription fee is $39 per month.

From cooperation to investment, then to acquisition, it is natural

Compared with several "predecessors" brands of home-based intelligent fitness, mirroror does not need to be used with other equipment except "mirror". Its design concept is obviously more in line with lululemon's Yoga style and scene.

According to overseas media reports, Brynn Putnam, founder of mirror, served as ambassador for lululemon ten years ago, which is believed to lay the foundation for the final "hand in hand" between the two sides.

Lululemon also invested $1 million in the B-1 round led by point72 ventures, a Wall Street hedge fund, in October 2019. Then, mirror and lululemon jointly designed and expanded new meditation courses and launched physiotherapy, rehabilitation and even telemedicine courses.

After the acquisition, mirror will operate as an independent company within lululemon, Brynn Putnam will continue to serve as chief executive officer and report directly to Calvin McDonald, chief executive officer of lululemon.

Brynn said he hoped that with the help of lululemon's retail and technological strength, mirror could reach a wider consumer group, become the "third screen" in people's homes (except for computers and mobile phones), and truly create "we always said that we believe we're building the next iPhone."

In the digital direction, lululemon is catching up with leaders like Nike

Sports and fitness has strong community attributes and learning needs. We can see that major sports giants such as Nike and under armour have been increasing investment in facing consumers, developing or acquiring app apps, constantly optimizing online experience, enriching digital content, strengthening community stickiness, and linking entities and online channels.

In contrast, lululemon has been focusing on enhancing the user experience and sense of belonging through activities, brand ambassadors, and communities around the store. Since the first store in Vancouver in 1998, its physical stores have been carrying the dual roles of yoga experience and clothing retail. Up to now, the brand has retained high-quality third-party places such as advanced yoga studio, fitness club and fitness center as distribution channels.

In the online channel directly facing consumers, in addition to the official website of the brand and the third-party e-commerce platform, the brand only launched simple mobile shopping app and lululemon fuel space health restaurant ordering app, which were launched in North America in 2014 and 2019 respectively, but the design and experience are not perfect. Compared with the massive fitness videos of Nike training club, lululemon There is very little video content in the app.

In the third quarter of fiscal year 2019, lululemon has taken a series of measures for e-commerce business to enhance the online shopping experience, and has further improved and implemented the bopis (online and offline single line down take) mode, so that customers can pick up the goods placed online in the store within one hour.

Due to the outbreak, lululemon temporarily closed all stores in mainland China in February, and then closed all stores in North America, Europe and other Asia Pacific countries in March. According to the first quarter financial report of fiscal year 2020, overall sales are lower than expected. Compared with the impact of the epidemic on physical stores, according to the financial report of the first quarter of fiscal year 2020, lululemon's direct consumer oriented e-commerce business has become a bright spot. Its online sales increased by 68% (by 70% based on the constant exchange rate), accounting for 54.0% of the total sales volume, compared with 26.8% in the same period last year.

It took only eight months to invest a mere $1 million to buy mirror for us $500 million. This fully proves that the importance of "digital" to lululemon has been greatly increased!


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