The acquisition – of an undefined minority stake – is part of a plan by the Vancouver-headquartered retailer to generate 50 per cent of new net profitability from businesses and categories in which it does not currently compete. The company has not ruled out a full acquisition down the track.
7mesh, a British Columbia startup, sells cycling jackets priced at $250 and shorts at $140 – highly specialised, performance-driven apparel for serious cyclists. Lululemon says it will collaborate on new ventures through its research and development division Whitespace.
In an interview with Fortune magazine, Lululemon CFO and COO Stuart Haselden described the collaboration as an interesting opportunity, “a relatively small effort if you will”.
“But what we like about it is it is an example of how we are looking to stretch our model of innovation outside our four walls. Cycling is a category that is small but if we could leverage a partnership with them, it could make sense for us to enter it effectively.
“We aren’t pursuing [cycling] as a big growth driver for our business, [but] it is a category that a number of our guests participate in.”
Lululemon aims to stock its first 7mesh collaborative lines in stores by mid-2018, to make the most of the peak cycling season.
This story first appeared on sister site Inside Retail Asia.