Lululemon partners with Life Time fitness to expand pickleball offerings, including new courts.

• Pickleball is gaining popularity, and Life Time fitness is capitalizing on this trend by investing in the sport and expanding its services.
• Life Time pickleball and tennis has named Lululemon as its official apparel partner, partnering with an upscale fitness company.
• The company has formed partnerships with tennis legend Andre Agassi and top-rated pickleball player Ben Johns to expand the sport.

is all in on pickleball.

On Saturday in New York City, it was evident that the dedication to America's fastest-growing sport was strong, as Ben Johns, a top-ranked male pickleball player, and former tennis champion Andre Agassi were honing their dinks and drops on Life Time's new courts.

The upscale fitness company is investing in pickleball as part of its strategy to expand its brand.

Life Time on Tuesday announced a partnership with Lululemon, naming the company as an official apparel partner of Life Time pickleball and tennis. The collaboration includes selling Lululemon apparel online at Life Time clubs and collaborating on key pickleball events.

Lululemon's partnership showcases the rapid expansion of these sports and unites top athletic wear with exceptional tennis and pickleball activities, according to Celeste Burgoyne, president of Americas and global guest innovation at Lululemon.

Over 170 "athletic country clubs" are currently operated by Life Time, which was established in 1992.

Post-Covid, clubs are seeking innovative ways to motivate Americans to exercise again. Life Time CEO Bahram Akradi, a passionate pickleball player, believes that the sport's popularity will be the driving force behind this movement.

He informed CNBC that pickleball is popular and always busy.

Life Time's Manhattan branch unveiled its largest indoor pickleball facility, a 54,000-square-foot club with seven street-level courts, on April 15, just blocks from Penn Station.

The largest provider of permanent pickleball courts in the country is now offering more than 700 pickleball courts nationwide after installing new playing surfaces or converting tennis courts.

Between $50 million and $100 million has been invested in pickleball by the company, which has resulted in 6% to 7% of Life Time's membership dues.

"That's a considerable amount," he remarked.

Life Time has partnered with professional pickleball to host over a dozen pickleball tournaments on their courts, with some being broadcast on national television. This week, the Atlanta Open, part of the PPA Tour, will take place at a Life Time in Peachtree Corners, Georgia, with an expected attendance of 16,000 people.

Recently, Agassi began playing pickleball, a sport with less impact, after years of wear and tear on his body from his successful tennis career.

According to Agassi, in the next five to seven years, there will be ten times as many people playing pickleball as there are now, due to its promotion of healthy habits, community building, and low entry point for beginners.

In February, Life Time named Agassi as the first chairman of its newly established pickleball and tennis board, with the responsibility of increasing the sport's visibility, events, and competitions.

Agassi stated, "I hope it will expand in college and in the Olympics."

Johns, a top pickleball player, is now offering advice off the court through Life Time. The company recently announced that he and his brother Collin will provide members with 70 instructional videos to help players improve their game.

Johns stated that CNBC that the partnership with Life Time was formed due to their dedication to promoting pickleball and their members' desire to improve.

John has witnessed the rapid expansion of pickleball and stated that his salary has increased tenfold since 2021 due to the sport's growing number of sponsors and media rights.

Already, Life Time's pickleball strategy is showing early results.

Despite a 23% decline in Life Time's stock value from March 2023 to March 2024, its first-quarter earnings report revealed a 20% increase in adjusted EBITDA and a 38,000 increase in net memberships.

The recent poor stock performance is attributed to a mix of macroeconomic, financial statement, and interest-related issues by analysts.

In our view, LTH is the most underappreciated story in the broader consumer space, as a Guggenheim analyst wrote on May 1.