The new partnership between Lululemon and Peloton helps both companies address previous challenges.

“We’re excited to collaborate with Peloton to connect with our highly engaged communities across North America and in markets around the world,” Celeste Burgoyne, Lululemon Americas and global guest innovation president, said in a statement. “As a leader in technical athletic apparel, this partnership will create a powerful product offering for Peloton Members and fans. Our two companies share a vision to advance wellbeing through movement, and this partnership ensures our lululemon Studio Members will have access to the most expansive and dynamic offering of fitness content possible.”

Lululemon will produce digital fitness content through spring of next year, and said in a separate release that it would continue partnering with Xponential Fitness, which currently offers Lululemon Studio members digital workouts and discounted rates at its physical fitness studios.

The partnership comes after Lululemon revealed in July that it laid off 100 Lululemon Studio employees amid an effort to focus more on digital content. The athletics company had made a big bet on at-home fitness equipment when it acquired the Mirror workout device in 2020 for $500 million. Lululemon’s fourth-quarter earnings results in March were strong overall, but Mirror hardware sales disappointed, and the company took $443 million in impairment charges related to Mirror that quarter.

The company released its cheaper membership plan just about a year ago, which allowed customers to access fitness content without owning the Mirror device, though the new partnership with Peloton will discontinue that tier.

“We view this positively for [Lululemon],” Wedbush analyst Tom Nikic said in emailed comments. “First off, it ends the saga of one of [Lululemon]‘s few strategic missteps in recent year, the $500 million acquisition of Mirror in 2020 (at the height of the at-home fitness craze) … Furthermore, there’s an opportunity to generate incremental revenue from being [Peloton]’s primary apparel partner (though we’d assume that a high percentage of [Peloton]’s ~7 million members already wear [Lululemon] products).”

For Peloton, the apparel partnership comes after the at-home fitness company attempted to run its own private line, first launching in 2021. The company had previously worked on apparel through co-branded partnerships with companies including Lululemon, but about a year after its private line debut, Peloton settled lawsuits with Lululemon in which Lululemon accused Peloton of copying its apparel designs. As part of the settlement, Peloton agreed to phase out certain designs.

Peloton hired Cédric Fletcher, who brings experience from companies such as Under Armour and Nike, as its new senior vice president of apparel and accessories this month. The company on Tuesday also announced that co-founder Tom Cortese would step down from the chief product officer role on Nov. 1 and will be replaced by Nick Caldwell.