Lululemon Athletica has acquired a stake in 7mesh.Lululemon, based in Canada, makes performance gear for sports like yoga and running. And 7mesh, also based in Canada, makes cycling apparel like jackets and shorts.

Lululemon is aiming to have an initial line of product from the collaboration with 7mesh in stores by the middle of 2018, aiming to take advantage of the key cycling season.

Lululemon wants to dispel the impression that it does only yoga gear and is a yoga-inspired apparel maker. In recent years, it has sought to sell more clothes meant for running, swimming, and even outer wear.

New ventures like 7mesh are part of Lululemon’s ten-year plan to generate 50 per cent of net new profitability from businesses and product categories where it doesn't currently compete.

Athletic apparel has become a very crowded market and sales and traffic trends have put pressure on yoga-inspired manufacturers like Lululemon. Because athletic apparel has become increasingly trendy, a number of non-traditional players—including H&M and Urban Outfitters—have jumped into the category and started competing with the legacy players.

While sales at Lululemon have remained sturdy, with revenue increasing by five per cent in the most recent quarter, competition within the industry has become intense