Peloton stock jumps 12% after announcing Lululemon partnership on apparel and fitness content

• Peloton stock rose as much as 12% Thursday after announcing a partnership with Lululemon.
• Lululemon will discontinue its Studio Mirror and steer customers to Peloton's classes.

Peloton stock soared Thursday after announcing an apparel and fitness content partnership with former rival Lululemon.

As a part of the deal, Lululemon will discontinue its Studio Mirror line and steer customers to Peloton, which will now become the exclusive digital fitness content provider for Lululemon. Meanwhile, Peloton will sell co-branded Lululemon clothes.

"In the months ahead, we look forward to bringing this partnership to life with Peloton and leveraging the strengths of both brands to further support our growing guest and member communities on their fitness and wellbeing journeys," said Celeste Burgoyne, president of Lululemon's Americas and Global Guest Innovation team, according to a press release.

The Lululemon partnership comes after each side attempted to break into the other's turf, igniting a rivalry. Lululemon's Mirror was a bid to break into the at-home fitness market, while Peloton had launched a line of its own apparel.

A few years ago, the two were tangled in lawsuits against each other, brawling over "copycat" workout apparel like sports bras and workout tights.

Peloton stock rose as much as 12% Thursday but pared gains sharply. It's down 41% since the beginning of this year and way below it's high of $167 in January 2021.

The company has struggled to perform well in the post-pandemic world. Once valued at around $50 billion, Peloton has sunk to $1.7 billion. today. In August the company saw a plunging stock and subscriber count after several bike seat defects.