Peloton shares soared thanks to a partnership with Lululemon

  • Peloton and Lululemon announced a five-year strategic partnership.
  • Peloton will develop digital fitness content for Lululemon, while Lululemon will become Peloton’s primary provider of activewear.

Jane Van Santford rides her Peloton exercise bike at her home in San Anselmo, California.

Ezra Shaw | Getty Images

Shares of Peloton rose Wednesday after the company announced a five-year partnership to develop digital fitness content for Lululemon.

As part of the agreement, Lululemon will become Peloton’s primary provider of activewear.

Peloton stock jumped more than 15% in extended trading. Shares of Lululemon — which has a market cap of about $48 billion compared to Peloton’s $1.7 billion — were flat in after-hours trading.

Lululemon said it will stop selling Studio Mirror, which allows users to stream workout classes, by the end of the year. It will still provide service and support for existing mirror equipment.

This news comes one day after Peloton announced that co-founder and chief product officer Tom Cortese is leaving the company. Peloton has shifted its strategy to focus more on subscriptions and less on expensive workout equipment.

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