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We performed a quantitative impairment analysis on October 31, 2022 for the lululemon Studio reporting unit. The result of this annual test concluded that the fair value of the lululemon Studio reporting unit exceeded its carrying value.
The Company recognized an impairment charge of $362.5 million related to the lululemon Studio reporting unit as of January 29, 2023 on the goodwill that arose from the acquisition of MIRROR. Please refer to Note 8. Impairment of Goodwill and Other Assets, Restructuring Costs for further information.
Mar 17, 2024 · Lululemon announced its intention to acquire MIRROR in 2020 for a purchase price of $500M, subsequently re-branded [it to] "lululemon Studio," and $362.5 million of goodwill was allocated to the lululemon Studio reporting unit. (Page 39)
The key assumptions used to estimate the fair value of the lululemon Studio reporting unit were the revenue growth rates, operating profit margins, and the discount rate. The fair value of the lululemon Studio reporting unit is a Level 3 fair value measurement.
Oct 29, 2023 · The undiscounted cash flows of the lululemon Studio asset group were less than their carrying value, and therefore the Company calculated the fair value of the asset group, which was also less than its carrying value.
a result of our decision to cease selling the lululemon Studio Mirror, we recognized an inventory obsolescence provision of $23.7 million in Q3 2023. This reduced gross margin by 110 basis points.
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Mar 29, 2022 · As of November 1, 2021, we performed a quantitative impairment analysis of the MIRROR reporting unit and concluded that the fair value of the MIRROR reporting unit exceeded its carrying value, and no impairment has been recognized. We used a discounted cash flow model to estimate the fair value, supplemented by market analysis, which indicated ...
