Peloton Interactive Inc (NASDAQ:PTON), the exercise bike maker, and Lululemon Athletica (NASDAQ:LULU), the sports clothing company, have joined forces in a five-year partnership that helped the former’s share price lift over 13% in after-market trading.
As part of the deal, Peloton's content will be integrated into Lululemon's exercise app and in turn the clothing retailer will become the fitness company’s primary athletic apparel partner.
Select Peloton instructors will serve as ambassadors for the apparel brand.
While specific financial details of the partnership were not disclosed, Peloton's stock surged as much as 15% on the back of the announcement, whereas Lululemon lifted less than a percent in after-hours trading.
Lululemon, which has around 13 million members on its fitness app, is to switch up its digital fitness offerings following plans to cease sales of its Mirror device, which allows users to stream their workout classes, by the end of the year.
Stemming from lower-than-expected sales and a substantial $443 million impairment charge, Lululemon had initially been exploring a sale of the product and while Peloton's content will become accessible on the Mirror platform it is undecided what will happen to the division going forward.
Peloton, which has been plagued by bike recalls and faulty products, has seen a decline in sales of its fitness products compared to pandemic-era highs, and the share price has reflected this, falling by 81% since IPO-ing in 2021.
Earlier this week, co-founder and chief product officer Tom Cortese, who had previously ruled out strategic partnerships, announced he would be leaving the company after 12 years.
“One thing that has worked very well for Peloton in the past and will continue to work very well for Peloton going forward is our direct relationship with our members. We’re not going to lose our direct relationship with our members,” Cortese revealed in an interview in May.
Shares in Peloton are trading at around US$4.60 while Lululemon is currently hovering around US$380.