Lulu and Peloton are swolemates
Canadian athleisure giant Lululemon (LULU/NASDAQ) is teaming up with the formerly mighty fitness machine maker Peloton (PTON/NASDAQ). The deal, announced on Monday, detailed that the two companies will enter a five-year strategic partnership. It seems they’ve settled their differences—this time last year, they had just settled a lawsuit in which Lulu accused Peloton of making copycat apparel.
Highlights of Lululemon and Peloton’s strategic partnership
- Lululemon’s apparel will be available at Peloton retail outlets and on Peloton’s apparel website.
- Lululemon’s All-Access Members (loyalty program) can stream Peloton’s classes.
- Lululemon will no longer be competing in the fitness hardware or exercise classes space.
Dion Camp Sanders, chief emerging business officer at Peloton, stated:
“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.”
The deal comes amid signs of resilient strength for Lulu, but with Peloton reeling after watching 97% of its share price disappear. (Market watchers chalk it up to fewer people working out at home, a significant drop in subscribers and the ballooning cost of a seat recall.) It’s interesting to note that in the topsy-turvy pandemic world of 2021, Peloton was briefly the larger of the two companies.
While the strategic partnership is likely to bring co-branding value to both companies, it is effectively an admission of failure by Lulu in regards to its USD$500-million acquisition of Mirror—another at-home smart fitness device—in 2020. With Lulu discontinuing sales of Mirror earlier this year in order to make room for the new Peloton partnership, one could assume there will now be a long-term truce in the two companies’ legal battle.
Stock bust: The worst of the worst
We’ve previously looked at the best-performing stocks. But now let’s look at the worst stocks of the last 100 years.
The above Visual Capitalist graphic shows the 25 worst stocks in the U.S.A. to have owned between 1926 and 2022. These companies have collectively lost shareholders USD$1.2 trillion over the last 100 years (14% of all shareholder losses).
Canadians, no doubt, recognize homegrown disappointment Nortel Networks (NRTLQ) on the left. It was once Canada’s largest company—at one point, it made up a remarkable 35% of the Toronto Stock Exchange. For context, today, Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN) and Meta (META) together make up 23% of the S&P 500.
Even with its gargantuan losses, Nortel only ascends to the number 10 spot. The heavyweight champ of evaporating shareholder value is WorldCom (WCOM). Before becoming embroiled in a massive accounting scandal, WorldCom was a long-distance telephone phone company. It declared bankruptcy in July 2002.